Posts filed under ‘• Real Estate’
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
Vashon Real Estate: Magical Garden Cottage for Sale
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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 Housing Market: Fall and Winter Home Sales
Despite the commonly held belief that Fall and Winter are tough sledding for home sales, the reality is that buyers shop for homes year round. It may be a mistake to pull a house off the market. Agents say that fall often brings out more “serious” buyers who need to find a home right away. There may be less competition for those buyers because many sellers aren’t willing to stick out the winter. Fall presents a good opportunity for the savvy seller to regroup and reconsider their list price. In Seattle, with the end of fine outdoor weather, Fall presents an opportunity to focus on home upgrades that distinguish their listing.
Vashon Home Finance – ARMs may make sense
The New York Times reports that adjustible rate mortgages, often dismissed by consumers, may still make sense in some instances. Where a home buyer does not intend to remain in a home for more than seven years, the ARM offers a relatively lower interest rate to the standard 30-year fixed. In today’s market, rates on bigger mortgages are giving buyers cause to consider ARMs, particularly where a buyer needs to go to lenders for jumbo loans that cannot be sold to Fannie Mae and Freddie Mac. The threshold figure for a jumbo loan in King and Snohomish Counties is $567,000, slightly above the median price for home sales in the region.
For purposes of comparison, current interest rates on a 30-year fixed hover around 7.5%. A $750,000 house would require a $5249 monthly payment. However, a 5/1 ARM, in which the rate remains fixed for 5 years and then adjusts every 12 months pegged to a market index, could get an initial interest rate of 6.56% resulting in a monthly payment of $4770, a savings of $479 per month.
After the initial 5 year period, however, the interest rate, and house payments, may rise (as much as 6 points!!!!) or fall.
Vashon Home Finance – Reverse Mortgages
For homeowners 62 and older reverse mortgages holds appeal as a method to access home equity and generate much-needed retirement income. The loan typically does not have to be repaid until the last surviving borrower lives in the home or until the house is sold. The loan is generally not taxable and does not affect Social Security or Medicare benefits.
However, the loan has several downsides for your consideration. Closing costs and fees are steep and if you are thinking of leaving your home in two to three years, this is not a financially desirable way to extract money from your house. A home equity loan may be a cheaper option.
Currently the limit on a reverse mortgage is $362, 790. Unfortunately, loan interest is usually variable and compounds, favoring the lender and not the borrower. Borrowers should expect to pay for an appraisal, a credit report, title fees and recording fees.
Vashon Home Finance: Mortgage Loans Available
Can you still get a home loan with less than a 20 or 30 percent down payment? Or with a credit score below 720? Absolutely! There is no shortage of money for home mortgages, no freezing of credit to purchase or finance a house, because the mortgage market has effectively been federalized. More than 90% of new loans are now made through the Federal Housing Administration insurance program. The FHA has unfettered access to the global capital markets and their borrowings are fully guaranteed by the U.S. Treasury.
You can still put down 3% (note 3.5% after January 1) on an FHA insured mortgage. FHA credit standards are generous and forgiving.Scores in hte upper 600s can still qualify for reasonable rates and fees. Maximum loan amounts continue at $729,750 until January 2009 when the max is projected to dip to $625,000.
Stunning Vashon View Property: Build Your Dream Home
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Vashon Real Estate Market Slows
Vashon Island real estate prices have fallen and inventory has grown in the first real downturn Vashon has experienced in 15 or 20 years. Buyers, particularly first-time buyers who can avail themselves of new government incentives, can find true bargains on Vashon.
Unfortunately, sellers are finding that traditional home marketing methods may not be adequate in this stagnant market.
Unique homes, waterfront properties or properties with special charms are still attracting buyers.
Windermere reports that 40% (67 homes) fewer homes were sold in the first 8 months of 2008 as compared with 2007 (107 homes). And time on the market has swelled from 58 days to 94 days within the same time period.
Prices have dropped 14% during this time period. And the number of sellers reducing prices is increasing.
See the complete September 24, 2008, Beachcomber article.
August 2008 King County Real Estate Statistics
08-08 King County Real Estate Statistics
By clicking the link above you’ll open a very informative PDF that provides valuable market data. Use the information it provides to help you determine the timing of your next move!
Receive a FREE Real Estate Consultation and a $5 Starbuck’s Gift Card!
Your complimentary consultation is not a sales call but a chance for you to speak with one of our experienced agents who can help you determine the type of information and support you’ll need to reach your real estate goals quickly and easily. Just call 206-463-SOLD if you’re interested in buying or selling a home on Vashon or Maury Island and enjoy your next trip to Starbuck’s on us!
With our compliments…
Go! Real Estate
The benefits of extra mortgage payments… owning your home sooner!
Even with the national housing market in a slump, the Seattle real estate market continues to appreciate. So, for those of you who already own a home, you know that your property is a solid investment. But what should you do if you’ve got some extra cash to invest?
Consider making additional principal payments which can significantly shorten the term of your loan and put serious money in your pocket. Here’s how it works…
When you buy your home and take out a loan, the lender earns a rate of return on the amount you borrowed, not just at the annual percentage rate of your mortgage but at a compounded rate because you’re borrowing the money for the long term.
But… if you pay down your loan, the reverse is also true in that you’ll not just earn the annual percentage rate on the amount you pay off, but a compounded rate of return because you’re effectively shortening the length of the loan. I did this on my own home several years ago and calculated that on a loan of about 8% interest, I was actually earning a compounded rate of about 13% on the lump sum I paid down against the principal. And it was a guaranteed rate of return, a LOT better than what I could have done in the stock market without risk!
The exact amount can be difficult to calculate if you don’t have an amortizing calculator. To make things easier, here’s an easy-to-use Mortgage Calculator that lets you figure in recurring or one-time principal payments and how that changes your pay-off dates.
Raising Home Sales Commission Paid Off
In general, the current real estate market remains strong in the greater Puget Sound area and still some property owners may need some help to bring in the offers. Instead of simply lowering the asking price, here’s an effective idea to encourage more agents to show up with qualified buyers (this idea may work equally well when applied to the Buyer’s Agent Commission):
By Robert J. Bruss of Inman News
DEAR BOB: Thank you for your article some time ago about real estate sales commissions. The home sale market in our town has been slow since January. Our listing agent, a trusted family friend, warned us home sales were slow so we listed with an asking price about $5,000 below market value. That didn’t work. After two months, she suggested we raise our sales commission to 7 percent with 4 percent to the selling agent. It worked like gangbusters! Within a week, we had two purchase offers. We accepted the best one and took the other as a “back-up offer.” Our home sale recently closed. Although we paid a higher than normal sales commission, we got an all-cash sale for almost our full asking price. Thanks for that great advice to raise the sales commission –Durk H.
DEAR DURK: In your situation, it was obviously more important to get your home sold than to net the highest possible sales price. Not all home sellers are so highly motivated.
Some home sellers prefer to cut the sales commission by one or two percent and wait “forever” to get their homes sold. Obviously, selling your home was more important than squeezing the last dollar from the sale.
90% of Locks Susceptible To Lock Bumping!
So you haven’t heard about Lock Bumping yet? Here’s a quick video that will help you learn how to safeguard your home and family. Just click the PLAY arrow below to learn more!
