Posts filed under ‘Ask Kyle – Our Mortgage Expert’
Vashon Island Real Estate Finance: Ask Kyle – Buying Up!
Buying up…
Moving from a starter home to a larger home and retaining the previous residence has been a great strategy for accumulating real estate and creating wealth. The recent phenomenon of buying and bailing in distressed markets has caused Fannie Mae and Freddie Mac to create new guidelines addressing the issue. Unfortunately this also makes it more difficult for homeowners to acquire additional properties. Most lenders are currently looking for 30% equity in the retained property or 6 months of payments (for both houses) in reserves.
Our current market provides a great opportunity to implement this move up strategy. Golf Savings Bank is a portfolio lender that isn’t subject to the same restricted guidelines such as a max of 4 financed properties and the difficulties of retaining a current home.
Give me a call to see how you can take advantage of these low interest rates and great buys.
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Ask Kyle: Vashon Island’s Real Estate Financial Guru – Timing the Market
Timing the market…
I’ve been encountering many potential buyers waiting for the bottom of the market. You will almost never be able to perfectly time the bottom of a market cycle. Trying to time the market can often be costly. It causes a buyer to miss out on the opportunity to purchase the right property at the right price.
In our current market there are a lot of factors working in favor of buyers. There are currently some great deals on homes. You’re better off negotiating the best purchase price and locking in a low rate and enjoy the benefits of homeownership. We’re near all time lows with fixed rates as low as 4.875%… It’s a great time to be a buyer! Call
for your free no obligation consultation….
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Ask Kyle: Vashon Island Home Finance – Locking versus Floating
I’ve been receiving questions on whether I suggest locking in or floating interest rates. We’re currently in a lending environment where rates are changing two or three times a day. With such volatility and rates as low as they currently are, it is a great time to be locking in. Nobody can consistently predict short term interest rate movement, and the risk is not worth the reward.
I’m advising my clients to lock their loans as there is a lot of comfort knowing that their interest rate is secured. A slight price improvement isn’t worth the risk of having rates move the opposite direction. Loans are taking longer to process and close due to tighter guidelines and higher loan volume. A standard lock period is 25-30 days depending on the lender. It may make sense to request a 45 to 60 day lock; this will give your lender a realistic time frame to successfully close your loan.
Give me a call to see how you can take advantage of these low interest rates. It’s a great time to be securing a fixed loan at near all time low rates.
Fax: 480.287.8704
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Ask Kyle: Home Mortgage Interest Rates at All Time Lows
Recent interest rate drops have everyone wondering what exactly is required to qualify for those low fixed rates. Interest rates are as low as 5.125% on 30yr Fixed loans. No, that’s not a typo and it’s not too good to be true.
It’s an excellent time to buy or refinance if you can qualify.
Lenders are looking for:
- Full Documentation… Income documented through W2’s & Pay stubs (2 yrs Tax Returns for those who are self-employed).
- Lower Loan to Value (LTV’s under 80% preferably)
- Credit scores of 680 +
It doesn’t sound like too much to ask for to qualify for fixed interest rates in the low 5% range. Over the last few years homeowners have been able to qualify with little in the way of income documentation. We’re back to basics with the current lending environment. There are only a few exceptions that will allow for stated income or low documentation loans.
The good news is that these historic low interest rates are available and should be taken advantage of. Give me a call to discuss your individual scenario…
Kyle B. Bailey
Mortgage Planner
Direct: 425.673.8227
Cell: 425.293.5371
Fax: 480.287.8704
kbailey@golfsavingsbank.com
Ask Kyle: Jumbo Loan Limits for 2009
Kyle B. Bailey
Mortgage Planner
What are the new Jumbo loan limits for 2009?
Direct: 425.673.8227
Cell: 425.293.5371
Fax: 480.287.8704
kbailey@golfsavingsbank.com
The Federal Housing Finance Agency has recently announced the 2009 conforming and jumbo conforming loan limits for 2009. The conforming loan limit will remain at $417,000. The jumbo conforming limit was reduced to 115% of median home values from 125% for 2008. The new conforming jumbo limits for King, Snohomish and Pierce Counties will be $506,000 for a single family residence. Jumbo FHA loan limits will also be set at $506,000 for 2009.
These new loan limits are for saleable loans; meaning loans that Fannie Mae and Freddie Mac have agreed to buy. Golf Savings Bank is one of the few financial institutions that have the ability to fund loans at higher loan amounts without the traditionally higher “Jumbo” interest rates. These are often portfolio loans that won’t be sold on the secondary market.
Give me a call to discuss your individual situation to see what interest rates and loan programs are currently available.
Ask Kyle: Vashon Home Finance – All About Loan Modifications
Kyle B. Bailey
Mortgage Planner
There is a lot of talk in the market about loan modification. Part of the Government’s mortgage bailout plan is aimed at helping homeowners who are struggling to make their current mortgage payment. There has been a lot of confusion on who exactly is eligible and how to go about getting help.
Eligibility is determined by several factors: Homeowners must be 90 days or more behind on their mortgage payments, be able to prove a hardship, owe 90% or more of their home’s current value and the home must be their primary residence. Mortgage payments would be adjusted by temporarily lowering interest rates (typically fixed for 5 years) or re-amortizing loans over a longer period such as a 40 year term.
Who do you turn to for help? There are several different options available to homeowners looking for help with a loan modification. They can contact their loan officer for a referral to a real estate attorney. Another option is to contact your local HUD office to work with a HUD approved counselor. Many homeowners are choosing to do it themselves by contacting their loan servicing department. If you find yourself in the above situation and need some guidance give me a call for more information.
Direct: 425.673.8227
Cell: 425.293.5371
Fax: 480.287.8704
kbailey@golfsavingsbank.com
Ask Kyle: How Much Can I Afford?
How much can I afford?This is a common question when home buyers first begin the house hunt. Oftentimes what someone can be approved for and what they’re comfortable making payments on each month are two different figures. A good mortgage banker will sit down with clients and discuss their individual situation. Often it makes the most sense to work backwards; starting with what is a comfortable payment and using that information to determine what price range they should be looking in. It doesn’t make any sense to fall in love with a home where the payments aren’t going to be realistic.
It’s important to have a good solid approval before starting to look at houses. In the past an approval letter wasn’t a necessity, but in our current market it’s imperative to know that you can actually obtain financing. For an approval to be valid you would have needed to provide income and asset documentation to your lender as well as had a credit report pulled. Too many buyers are suffering through a miserable purchase transaction because things weren’t done correctly from the beginning of the process. The majority of these issues can be avoided if you’re working with a knowledgeable loan officer.
If you’re looking to buy a new home or refinance your existing mortgage give me a call to discuss your options in this ever-changing lending environment.
Kyle B. Bailey
Mortgage Planner
Direct: 425.673.8227
Cell: 425.293.5371
Fax: 480.287.8704
kbailey@golfsavingsbank.comwww.KyleBaileyCMPS.com
Ask Kyle: How Hard Is It to Get a Mortgage?
I’ve been out beating the streets and am amazed at how often I’m asked about qualifying for a loan. There is a misconception that loans aren’t being funded.Is it true it’s nearly impossible to qualify for a home loan?
Absolutely not; we’re still busy helping homeowners with both new purchase loans and refinances. Lenders are back to the basics, requiring decent credit scores and a little bit of down payment. There are also several loan programs designed to help first time home buyers. Borrowers can qualify with credit scores as low as 600 and as little as 3% down payment. Other than credit scores banks are looking for income and assets that can be verified. Overall the scenario needs to make sense and be well documented.
Not all loan officers are equal and you want to ensure you have a knowledgeable mortgage professional working on your behalf. If you’re looking to buy a new home or refinance your existing mortgage give me a call to discuss your options in this ever-changing lending environment.
Kyle B. Bailey
Mortgage Planner
Mountlake Terrace Branch Office
6100 219th St SW Suite 480
Mountlake Terrace, WA 98043
Direct: 425.673.8227
Cell: 425.293.5371
kbailey@golfsavingsbank.com
Vashon Mortgage News
The slide in home prices across the country has left one in six, or 16%, of U.S. homeowners owing more on a mortgage than their home is worth in the marketplace, raising the possibility of a rise in defaults. With governments around the globe scrambling to shore up stock markets and banks, there is little certainty that the situation will improve in the near term. There are few alternatives available to distressed homeowners seeking to refinance or sell their homes when their mortgages are greater than home value. Foreclosed upon homes have an impact on the value of surrounding homes in a neighborhood. For an excellent summary of the mortgage market, see The Seattle Times, Sunday October 13, p. D4.
First-time Home Buyers
Financial Planners Offer Sobering Advice – Life Offers No Guarantees
The decision to purchase a home requires more than knowledge of the housing market. Partners must be emotionally ready and in agreement with their life dreams and goals. Because a home purchase, particularly a first-time purchase, is one of the most significant milestones in your financial life, it is helpful to consider all of the ramifications of a commitment to a property. This excellent article emphasizes the need to clarify goals and to prioritize financial and life plans. See Seattle Times.
