Posts filed under ‘• Real Estate’
Vashon Homes for Sale: 2009 Change to Limits on Conforming Loans
On January 1, 2009, the conforming loan limit for government-sponsored loans (loans backed by Freddie Mac, Fannie Mae and the FHA) will change from the current $567,500 to $506,000 in the Seattle area, removing the opportunity for buyers seeking mortgages of more than $506,000 at low interest rates. Higher interest payments and larger down-payment requirements will soon apply to loans in excess of $506,000.
Perceptive home sellers should take note of this change in setting the listing price for the home. A house priced within the $506,000 cap will have an extra measure of attractiveness to buyers able to qualify for the government-sponsoreed loans. Further, sellers should be tuned to the fact that with home sales decresing and interest rates at historically low levers, the number of potential home buyers nationwide (and locally) has reached the highest level in more than four years. According to the NAHB/Wells Fargo Housing Opportunity Index released last week, 56.1 per cent of all new and existing homes sold were affordable to families earning the national median income of $61,500.
The Seattle region is still unique in terms of the housing inventory . . . home values may have fallen, but they are still among the highest in the country. Further, a blessing to sellers, Seattle has less inventory than many other areas of the country, which shapes the supply-demand balance. Sam Anderson, executive officer of the Master Builders Association of King and Snohomish Counties, suggests that Seattle’s diverse economy could place the region in a position to lead the economic recovery charge.
Between now and December 31 is a special opportunity for buyers to take advantage of the availabilist of an extra $61,500 of purchasing power at a time when the region’s housing market may be poised for a rebound.
Vashon Homes for Sale: Gorgeous North End Views
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Vashon Homes for Sale: Spectacular Views – Reduced Price
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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.
Vashon Real Estate: Sales Prices Should be Reconsidered
An emerging truth about the state of the current housing market is also an old bit of wisdom. In its most familiar guise, “a house is only worth what a buyer is willing to pay for it.” In today’s Buyers’ Market, serious home sellers must take a bite of reality sandwich in setting their sales pricing strategy.
By “serious home sellers” I am excluding those home owners who float their homes on the market at an unreasonable price in hopes that P.T. Barnum’s proverbial sucker will come out of the woodwork in a minute.
A realistic home seller, today, must reassess his or her expectations in view of the many factors at play in today’s economy. A recent report from Coldwell Banker showed that more than three-quarters of its real estate agents surveyed said “most sellers have unreasonable initial listing prices for their homes.” In the context of traditional house marketing wisdom, an unreasonable initial sales price will deny a seller an opportunity to take advantage of the one month honeymoon that a new listing experiences on the market. During that first month of listing, a new listing will attract significantly more buyer interest than at any other time in its on-market history, and a serious seller simply cannot afford to squandor that opportunity.
As the Seattle Times reported on November 23, 2008, “the housing market may have gone bust, but many homeowners are still living in a bubble.” A study released by Zillow.com (which GoVashon does not recommend for accurate valuation services) found that half of homeowners polled think their home’s value has increased or stayed the same in the past year.
An owner’s attachment to a home for sentimental reasons only intensifies the trauma of setting a realistic selling price. This places real estate listing agents in a precarious position in their effort to help a seller set a reasonable price in the context of the seller’s inflated expectations.
In fact, setting an unrealistic price tends to sustain the unstable market, with seller’s keeping the inventory artificially high by over pricing their homes or, in frustration, pulling their listing off the market with the intention of adding it to the glut of homes that will re-enter the market when the economy stabilizes.
The bottom line is that a seller should pay close attention to a real estate professional’s custom Comparative Market Analysis before deciding whether to list their home for sale. The consequence of inflated expectations is that a home may sit unsold for months, wasting the seller’s and the agent’s resources, and unintentionally sustaining the meandering of the market.
Vashon Housing Statistics: Year-to-Date October 2008
Year-to-date October 2008
New single family homes units sold in October 2008 up 3% from September 2008
New Single Family Homes (vs. Year- to date 2007)
Average sale price: $652,714, off 2%
Median sale price: $530,303, off 4%
New homes represent 18% of volume and 15% of units recorded
2,035 sold vs. 3,177 last year, off 36% volume: off 37% to $1.3 billion
Average $/SF: $247.18, off 5% (49% of sales with data)
Best range: $500,001 – $600,000 with 31.1 per month
Next best range: $750,000 – $1,000,000, with absorption of 30.5 monthly
Best lot range: $200,001 – $300,000, with absorption of 8.6 per month, off 47%
Subdivisions (vs. 2007)
The average lot sold for $222,905, off 17%
Half the lots sold for more than $198,333 (median), unchanged
29.4 sold per month vs. 84 last year , off 65%
Average lot represents 34.2% of the average priced new home
The median is 37.4% of the median priced new home
Attached unit sales off 13% in October 2008 from September 2008
Attached (vs. Year- to date 2007) includes condos, commons and town/row homes
Average sale price: $362,267, up 2%
Median sale price: $315,000, unchanged
33% (2,000 units) of sales are new
6,135 sold vs. 11,429 last year, off 46%; volume: off 45% to $2.2 billion
Average existing $/SF: up 2% to $320.42 new: $321.21, off 3%, (61% w/data)
Range with best sales, existing: $300,001 – $350,000, with 55.1 per month
Range with best sales, new: $300,001 – $350,000, with 32.1 monthly
Projection
Relative inventory increased to 9.3 months, a buyers’ market. Prices will remain soft.
With unemployment rising, potential home buyers have become more cautious as
have lenders. Foreclosures will rise with short sales lowering prices.
Customer Service:
Year-to-date October 2008
Residential sales volume for October 2008 decreased 9% from September 2008
All Sales (vs. Year- to date 2007)
Residential sales volume: off 42% to $9.7 billion
Residential transactions: off 41% to 19,726
Mobile home sales on land: off 48% to $33 million
Plexes (2-5 units) sales: off 57% to $165 million
Land sales: off 74% to $236 million
Commercial volume: off 66% to $2.5 billion
Average residence: $489,591, off 2%
Existing home transactions sold decreased 12% in October 2008 from September 2008
Existing Home Sales (vs. Year- to date 2007)
Units sold: off 38%; volume: off 41% to $5.9 billion
11,133 units sold this year vs. 17,908
Average price off 5% to $532,699
Half homes (median) sold for less than $429,500, off 4%
Average $/SF for homes sold at $278.04 (all sales), off 7%
Best range: $300,001 – $350,000, with 137.3 monthly
Second best absorption rate: $500,001 – $600,000, with 127.9 per month
11.7 acreage parcels sold monthly, off 66%; average price: $231,367 off 28% from last year
Acreage Sales (vs. 2007)
55.8 per month existing homes sold, off 44%, average price: $734,800, off 11%
Median price for existing homes: $581,000, off 8%
5.3 new homes sold monthly, off 45%, average price: $997,782, up 2%
Median price for new homes: $807,000, up 27%
The $/SF for existing homes: $295.92, off 16%; new: $250.22, off 18% (57% w/data)
Average lot sizes, for existing homes: 3.7 acres, up 13%; new: 3.2 acres, off 47%
The average price per acre for acreage lot sales: $88,058, off 21%
September residential recorded transactions were 23% fewer than last September.
Source: Commonwealth Land Title Company of Puget Sound, LLC
Vashon Real Estate: Going Green with Paperwork
Twenty years ago a house sales transaction required three sheets of paper. Today a sale takes 25 sheets of paper (at a minimum). Changes in state and local laws, the increased sophistication of the parties to a transaction, and the need to spell out in detail all of the items that might end up in a lawsuit are driving the blizzard of documents that surrounds a home sale, according to the Northwest Multiple Listing Service. This ream of paperwork also involves a significant increase in the amount of energy consumes by the parties to a transaction, their agents and brokers.
In a recent transaction handled by Keller WIlliams, the complexity of the transaction multiplied the paperwork exponentially, as the buyers wrestled with financing issues, multiple offers, sought extensions for deadlines, made an offer on a bank-owned house which was declined by the bank, and mismanaged exchanges of faxes.
Is this waste of resources and energy really necessary? Many parties do not even read the fine print presented to them by their agents, instead relying on the expertise of their agents to steer them through the boilerplate.
What do the forms accomplish? A Purchase and Sale Agreement, along with customized addendums, is the instrument defining the offer that a potential buyer makes on a home and the the terms of sale are negotiated. This document is subject to back and forth negotiations by the parties. Eventually, in a successful negotiation, one P&S Agreement emerges with the agreed terms to the deal.
The Purchase and Sale Agreement is accompanied by a Financing Addendum, Identification of Utilities, an Optional Clauses Addendum, Inspection Addendum, Inspection Notice, Title Contingency Addendum, Addendum/Amendment to Purchase and Sale, Seller Disclosure Statement, Disclosure of Information on Lead-based Paint and Lead-based Paint Hazards, Agency Disclosure, Commission Disbursement Form, and a Northwest Multiple Listing Service Status Change.
Go! Real Estate has recognized the need to reduce paperwork in housing transactions and has implemented policies to promote the electronic exchange of documents. These documents are legally valid and can be exchanged via the internet rather through an exchange of paper and the delay of mail delivery. This is just one way that Go! has embraced the internet to create a greener real estate practice.
Vashon Real Estate: Market Trends
RealtyTrac’s foreclosure numbers for Octobergrew dramatically, more that tripling in King County from September and the previous October. Specifically, 935 homes in King County were issued Notices of Trustee Sale. Compare the numbers to September 2008 (260) and October 2007 (282). The good news, however, is that the rate of increase is below the national rate. RealtyTrac suggests that Seattle may be seeing larger increases recently because the foreclosure surge in the region started later than the majority of the country.
October Home Sales
Seattle Region Vashon
Closed Sales 10/2007 1659 6
Closed Sales 10/2008 1319 4
Per cent change -20.5% -33.3%
Median Price 10/2007 $443,950 $547,500
Median price 10/2008 $392,000 $476,250
Per cent change -11.7% -13.0%
Vashon Real Estate: Help for Freddie Mac and Fannie Mae
On November 7, Federal officials announced a plan to rework threatened home loans owned or guaranteed by mortgage giants Freddie Mac and Fannie Mae. The move was intended to stop the downward spiral in the housing market. The program is scheduled to start December 15, and is open to borrowers who have missed at least three payments, have loans for at least 90 % of the home’s value, live in the home as a primary residence, and have not filed for bankruptcy. The plan will reduce payments to no more than 38% of a household’s gross income by reducingthe interest rate, extending the life of the loan, deferring payment on part of the principal, and customized steps, if needed.
Critics say that the program does not go far enough. Evidently Wall Street agrees, with the market on a roller coaster demonstrating that the news does not have a stabilizing effect on the economy.
One wonders whether the Fed actually has a handle on the crisis, or will continue to throw good money after bad as the economy spirals. Forecasts for the retail economy during the critically important holiday season are dismal, with fear of further downturns, particularly in the employment sector, causing many consumers to cut back on purchases. The news out of Detroit, as automakers plead to have their own bailout program after years of mismanagement, intensifies the impression that stability is a long way away. President-elect Obama is said to be sympathetic to the automakers’ pleas, which may mean that the next Administration may continue to throw money (to be paid for by our children’s children’s taxes) at the problem.
To make matters worse, the Bush Administration has urgently shifted course in its initial bailout proposal after only a few weeks of testing the plan. Treasury Secretary Henry Paulson announced that the program would not, as originally announced, fund the purchase of distressed mortgage-backed securities and other troubled assets on the books of banks,ensruing that the housing market would continue to dangle iun the wind. The Administration is casting about to find new ways to shore up banks, credit cards, auto loans, and other huge NON-BANK businesses. Wall Street, predictably, tanked upon hearing the news. Projecting an image of no-confidence in its own hastily conceived plan, the Administration is making matters grave.
This writer urges the Congress and the Administration to abandon its high spending un-regulated aid to a few monolithic institutions and to channel funds to local banks to enable local lending at a grass-roots level. The notion that trickle-down economics will work to aid Main Street Americans has been disproved and renounced by Alan Greenspan. The centralization of economic power at the expense of the vast majority of the country is an indirect method to aid the people of this country.
This writer can only hope that President-elect Obama proves to have the integrity to see through the status quo in Washington, D.C., and Wall Street, and turn the power of government toward the welfare of the people.
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
Vashon Island Real Estate: Foreclosure Rumors and Solutions
The Seattle Post-Intelligencer reported on October 30 that the federal government may use $50 billion of the recently approved bailout money bailout money to stem the tide of real estate foreclosures for approximately 3 million homeowners. The $50 billion investment would guarantee roughly $500 billion in mortgages under banking loan policies.
The plan could include loan modification that would lower interest rates for a five-year period and is an aggressive first cut at the damage inflicted on the economy from the US housing recession. The Mortgage Bankers association reported that more than 4 million Americans are at least one month behind on their mortgage payments at the end of June, and 500,000 Americans had started the foreclosure process.
Update: On November 12, the Seattle Post-Intelligencer reports that Federal officials have approved a plan to rework threatened home loans owned or guaranteed by mortgage giants Fannie Mae and Freddie Mac. The Federal Housing Finance Agency, which took over Freddie and Fannie in September, announced the plan with multiple officials from the US Treasury, Department of Housing and Urban Development, and Wells Fargo among others.
Freddie and Fannie own or guarantee about 58% of all single family loans. Those loans represent only 20% of all serious delinquencies.
The new program is scheduled to start in December 15 and is available to borrowers who have missed ar least three payments, have loans for at least 90% of the home’s value, live in the home as a primary residence, and have not filed for bankruptcy.
The program will reduce payments to no more than 38% of the household’s monthly gross income by reducing the interest rate, extending the life of the loan, deferring payment on part of the principal, and customized steps, if needed.
However, the program has been called not extensive enough to help all mortgage holders in crisis.
Vashon Island Real Estate: State of the Market
The Seattle Times Real Estate Section for November 9, 2008, contained two sobering articles about the continuing perturbations in the national housing market. The first article, A Realty Reality Check, written by Ylan Q. Mui of the Washington Post, discussed the impact of Consumer Fear in the face of the current economic turmoil. The second article, Bargains Help Cut Housing Glut, written by James R. Hagerty of the Wall Street Journal, discussed the impact of purchases of foreclosed homes by investors hunting for distressed properties. Taken together, these articles offer sound wisdom to both sellers and buyers on Vashon Island.
The thesis of Mui’s article is that the palpable fear of homesellers that they are losing enormous amounts of home equity if they put their home on the market today, and the corollary fear of buyers that the market has not bottomed out and that they can expect deeper price cuts if they wait it out, has caused the market to freeze. Even though reports suggest that banks are now making mortgage loans available to qualified buyers, demand for mortgages has declined.
Mui writes that psychologists are ranking the emotional angst on a par with the stress of divorce and even death. Behavioral economist Rom Brafman calls the condition “loss aversion,” that is, when FEAR of action creates a stagnant economy. The condition is insidious. It works like this: if the median price of houses were to fall slightly, a few more homes would sell; but, if the median price would rise by the same amount, home buyers would drastically cut back on their willingness to purchase a home.
For example, a 2001 study of the Boston housing market found that sellers who expected to take a loss on selling their condominiums set prices HIGHER than did their competitors, effectively pricing themselves out of the market. By the same token, buyers can also take themselves out of the market with inflated views of their purchasing power in a distressed market, passing by reasonably priced homes on a gamble that a sweeter deal is around the corner.
Consider this emotional analysis with Hagerty’s article concerning the emerging investment market in distressed properties, investors snapping up properties to turn into rental units. The effect is an apparent decline in the amount if inventory on the market which consumers might mistake for a turn in the traditional market.
The mistake is that these sales are not traditional transactions between homeowners and buyers, and they are not spread across the board of available inventory. These transactions are between investors and banks which have foreclosed on properties and are in all liklihood selling the properties at some loss.
Consider. A quarterly Wall Street Journal report on data from 28 cities shows that the glut in homes listed for sale is shrinking. The Census Bureau reported that seasonally adjusted new home sales were down 33% from September 2007. The National Association of Realtors reports that sales of previously occupied homes edged up 1.4% in September relative to 2007. Further, housing analysts caution that many homes that aren’t currently listed for sale may hit the market within the next few years.
Factor in evidence that many sellers have taken their homes off the market to try to wait out the storm, and intend to re-list their properties when they perceive the market has strengthened . . . which will swell the market dramatically down the road. This future glut will continue to depress prices!
As we all know, the general economic news is getting worse. Selective bailouts by the current administration do not seem to stem the tide of market shift.
What is a home seller or buyer to make of this data and the perception that the purchase or sale of property is a fearful event?
First, be cognizant of the role fear is playing in the market and remove it from your decision making calculus. Second, view the purchase of a home as a long term investment, similar to the approach a prudent investor takes in the stock market. This advice applies to a home seller who is moving on to a new property. Third, be aware of the impending increased glut in the market as more foreclosures arise AND as sellers decide to relist their homes out of necessity or a perception that the market is correcting.
Finally, homesellers and real estate professionals must take a cold hard look at today’s market, not the artificial market of yesterday that was fueled by sub-prime lending. A realistic home price today should be set through consultation with an experienced professional who is deeply aware of local market trends.
Celia Chen, director housing economics at Moody’s Economy.com, expects a further drop of 14% before prices bottom out in the second half of 2009. Be aware that the market will not bottom out or recover at the same time for all regions of the country and for all sectors of the housing market.
Vashon Real Estate: Outstanding Financial News for Owners
Forbes Magazine Identifies Seattle Area as the Housing Real Estate Market Most Likely to Respond
Dorothy Pomerantz writes on October 29, 2008, that trends in the commercial real estate market indicate that Seattle is viewed as the strongest area in the country to invest in real estate. In a survey of 700 real estate professionals performed by the Urban Land Institute, Seattle ranks NUMBER ONE in factors tied to economic recovery potential. Those factors include cities that are gateways to international investment, have vital down town areas (note the recent referendum to fund the rehabilitation of the Pike Place Market!!!!), and no glut of office space or condos.
The single-family home sector typically follows the economy of the commercial real estate market.
If you’re a homeowner seeing property values plummet, look to the commercial real estate market for solace. It might tell you which areas will recover fastest–and which will likely remain weak. The Urban Land Institute recently asked 700 real estate professionals to name the best (and worst) places to invest in commercial real estate in the coming year. Those surveyed included private developers, Realtors and Real Estate Investment Trust executives. Their answers also apply to the residential market, since the single-family-home sector typically follows the economy. As wages go up and there are more jobs, more people can buy homes, pushing prices up.
These traits landed Seattle the No. 1 spot on the list. Stephen Blank, Senior Resident Fellow with the Urban Land Institute, writes, “Seattle is “a diversified market, has a good base of business and is becoming a 24-hour city.” “It’s going to be in a good position to come back.”
Although the city is suffering from the loss of Washington Mutual and the downsizing of Starbucks, Boeing and Microsoft are still relatively strong. Apartment vacancies are low and there aren’t too many new buildings going up, meaning the market won’t be oversupplied. The same is true in the retail space.
The remainging question, of course, is when are consumers going to regain their confidence in the Seattle real estate market and take advantage of the buyers’ market that exists.
Vashon Home for Sale: New Beautiful Custom Home – New Price!
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Vashon Island: Local Mortgage Rates
The Seattle Times reports a slight uptick in 30-year fixed, 15-year fixed and 1 year ARM rates for the month of October 2008.
Vashon Real Estate: Home Prices
The Seattle Times reported on November 2, 2008, that 4 out of 10 Seattle area homes have had their asking price discounted in response to the state of the current housing market. According to Zip Realty, a national real-estate brokerage which analyzed housing trends for the past three months, most cuts were in the 1 to 5% range. The deepest cuts were on Mercer Island where homes sold for 91.8 per cent of their asking price. Zip Realty provides no analysis for the price discounts. However, fundamental economic theory suggests that the supply/demand ratio still favors buyers in the current market. With Federal financial action, intended to strengthen the availability of mortgage lending, beginning to trickle down to local lenders, it is difficult to forecast how long theis buyers’ market will endure.
Zip Realty found that the percentage of Seattle area homes subject to price reductions has increased 2.9% compared with the same period in 2007. Zip also discovered that Seattle has experienced one of the largest inventory increases among major metropolitan areas, 8.8 % more than the same period in 2007.
Factors to consider in setting a home sale price include:
- whether your home is in top shape for sale, as buyers know there are competitive deal available
- the availability of similar homes in the neighborhood creates price competition
- local foreclosures depress the price of other for-sale homes
- and, the biggest reason, sellers initially list a house too high, which knocks a seller out of the window of opportunity for first-time listings
Vashon Real Estate: Sellers Acting as Lenders!
In view of the tightening mortgage market, some home sellers are seizing the opportunity to finance home sales on their own. For sellers with the capacity to take on financing, this option represents a terrific opportunity to distinguish a home from the competition in this buyers’ market. Among the benefits for a seller is the opportunity to create an income stream via mortgage payments and the availability to realize an interest return. Capital gains can be deferred and create retirement income.
Loans that are most difficult to obtain, including jumbo mortgages and financing for commercial properties, are traditionally subject to owner-financing agreements, however, the same options can be done for any property type and the seller can finance all or part of the loan.
Seller financing opens up a home sale to a broader range of potential buyers who might otherwise be overlooked under traditional mortgage criteria, including self-employed, those who work on a commission, or buyers with credit issues.
There are, of course, risks involved, and sellers need to be well-informed before pursuing this option. It is wise to get an attorney’s eyes on any agreement a seller may contemplate.
For more information on owner financing, visit NoteQueen.com.
Vashon Housing Market Favors First Time Buyers
First time homebuyers are understandably anxious about the availability of financing for a home purchase. However, the availability of loans from local and regional lenders through FHA loan programs remain intact. FHA loans are guaranteed by the government and have low down payments, typically 3% to 5%. Mortgage brokers indicate that the primary difference in lending is in income verification and more thoughtful appraisals.
First time Vashon homebuyers should know that there exists a new tax credit which is essentially an interest-free loan re-payable over 15 years.
So it is a great time to take advantage seriously competitive home prices and an opportunity to take advantage of increases in home values as the economy improves. Your first step is to get a pre-approval letter from a qualified mortgage professional.
September Jump in Existing Home Sales
The National Association of Realtors reports that sales of existing homes (i.e., not band new homes) rose 5.5% in September. This increase is the first in over a year and supports the opinion of analysts that the home sale market financial crisis is reaching equilibrium.
Note also that foreclosure filings in King County fell 42% from August filings, and 13% from September 2007, as reported by Realty Trac. The significance is that fewer distressed properties are available to buyers with cash searching for a bargain.
Consumers should be aware that some mortgage lenders are open to renegotiating and modifying the terms of loans, and even freezing interest rates for a specific period of time. The terms are subject to the specific lender involved and consumer willingness to enter into negotiation. New State laws are helping to reduce mortgage foreclosures . . . tho mortgage counselors are seeing more troubled borrowers. Be aware that it takes a lot of persistence to accomplish a modification.
For more information, check out Solid Ground, a non-profit housing counselor, certified by HUD. Solid Ground currently offer mortgage intervention packages to consumers. Email Solid Ground at housingcounseling@solid-ground.org to request a packet.
