Category

Economy

Jun 16
0

Updates in underwriting

By | Buyers, Economy, Financial news, Sonoma County info | No Comments

Pete Phillippe from Indymac Bank was so kind to send an extensive overview with updates in underwriting as of June 1, 2008 Industry wide General Loan guidelines by the Secondary market (some variance with specific Lenders).

  • With Foreclosures , reestablished credit history now 3 yrs after event before a new loan given
  • No 60 plus mortgage lates within the last 12 months
  • Authorized users of credit trade lines will no longer be considered in credit decisions. Can’t piggyback on someone’s good history. FICO now is “not using” card holders good scores for the authorized user to improve their own scores
  • On interest only loans, borrowers have to be qualified on the full principal and interest payment
  • Min. credit scores 640 for 1 to 2 unit properties, 680for three to four units . . .620 if LTV less than 75% of property value
  • Stated income loans max. 80% ltv for w-2 wage earners and self employed or commissioned borrowers, or combinations of salaried and commissioned. Usually 700 middle ficos required. Cash out? 75% ltv’s
  • With FHA loans 580 and above FICOs still ok with alternative credit documentation and “good” credit explanations

Dont’ forget, these are general guidelines, exeptions are possible with every lender. For more info, you can also contact Pete Phillipe @ Indymac bank 707-535-1263. He will give all his client free credit reports.

More to come in the coming days.

Mirjam (mirjam@c21alliance.com)

May 30
0

Better to buy than to rent

By | Buyers, Economy, Sonoma County info | No Comments

David Leonhardt had an interesting thought in this morning’s NY times.

After being a renter for all the good reasons, he finally decided to buy. The article did make sense, however he forgets the rules of inflation. How much was a 3 bedroom 2 bathroom home in the area where you live 30 years ago? How much was the rent at that time? How much is the rent for that same home right now? To my opinion, in the long run it’s better to buy than to rent, however, if you only plan to live in an area for 1 year (for work or other reasons) you’re probably better of renting.

The New York Times also featured an interesting graph (Buying vs renting). It’s fun to play with it, don’t forget about the rules of inflation though…

And by the way… today is a great day to buy real estate in Sonoma County!

Have a great day!

mirjamnew.jpg Mirjam (707-486-2638)

May 25
0

You first home is free!

By | Buyers, Economy, RE by the numbers, RE Investing | No Comments

George Houghton a CPA in town who is specialized in Real Estate gave a seminar this Friday. His concepts on Real Estate and Real Estate investing in the Bay area are profound and supported by numbers. Please remember, these are concepts, give or take a few years.

Rules of inflation (excluding high tech stuff and salary) : every 30 years add a zero. Think about the value in gold, rent, ticket to the movies etc

For Real Estate: every 10 years values double , every 30 years ad a zero.

Your first house is free. You have to live somewhere and if you take the cost of renting a home, compare that to all the tax benefits of owning a home, it’s almost the same. Rent is paid to someone else, mortgage is paid ‘to yourself’. Of course this does not work for a million dollar home but for an entry level/median home.

Every rental cost about 10% of the value. Yes, this is true, think about it, I look forward to your reaction!

And last but not least: every $10K spend on a car is the same as $100,000 is Real Estate and 1 million in retirement… I know you have to enjoy life but it gives something to think about an spend more consciously.

By the way: George Houghton wrote a book: Unleash the power of Real Estate.

Have a great weekend!

 Mirjam de Rijk Mirjam (mirjam@c21alliance.com)

May 07
0

Snapshot of our market

By | Buyers, Economy, RE by the numbers, RE Investing, Sellers, Sonoma County info | No Comments

I know the market fluctuates all the time but I have been noticing that a lot of homes have been going into escrow, it has been rising over the last 5 weeks. It started slow but then it picked up. And yes, a lot of the homes that went into escrow also closed. Look at the statistics that I pulled from Broker Metrics a program that very conveniently pulls the data from our local MLS system.

The media is giving you info that the economy is going through the drain, the Fed will have to cut interest rates again. Perhaps they are right, but keep in mind John D. Rockefeller who said “The way to make money is to buy when blood is running in the streets.”

The info is also great for sellers, should you need or want to sell your home, the numbers clearly indicate the  ‘new reality’.picture-2.png

The above statistic is from all Sonoma County. The drop shows that a some people have take their home of the market at the end of the year, some home owners who were trying to do a ‘shot sale’ did not succeed and the property went into foreclosure (these properties will come back a few months later as an REO) and it clearly show the increase of activity.

I look forward to your feedback!

Mirjam de Rijk   Mirjam (707-486-2638)

Apr 17
0

Let The Facts Decide…

By | Buyers, Economy, RE Investing, Sellers | No Comments

In today’s housing market, the media’s continued focus on negative real estate news is keeping many people solidly on the sidelines. But remember, you are not getting the whole story.

FACT #1: THERE IS STILL OVER $23 TRILLION OF VALUE IN U.S. HOUSING STOCK. Home ownership continues to be the basis of our wealth in this country.

FACT #2: THE HOUSING MARKET CANNOT HELP BUT GROW. Our country’s tremendous wealth, liquidity, and entrepreneurship will continue to drive our economy. 70-100 million people will be added to our market in the next 40 years.

FACT #3: REAL ESTATE IS CYCLICAL. The biggest fear in good times is that the fair weather won’t last forever—because it doesn’t. But the reality of a cyclical real estate market also provides its brightest hope in bad times—foul weather won’t last forever either. What’s happening today is a market correction, severe in some places, but it’s not the end of the world. The markets will stabilize.

FACT #4: 2008 IS THE BEST YEAR TO BUY A HOME IN 35 YEARS. 1973 was the last time mortgage rates were this low in a buyer’s market. We had rates this low in 2001 and 2002, but those were strong seller’s markets with little inventory. The last two big buyer’s markets, in the early ‘80s and early ‘90s had much higher rates. Low rates and good inventory make 2008 the best year to buy in decades!

FACT #5: FIRST-TIME BUYERS HAVE A REAL ADVANTAGE IN TODAY’S MARKET. First-time buyers can buy at a reduced price without having to sell at one too. Higher limits on lower cost conforming loans also help first-time buyers purchase more home for their money. Today’s ‘starter’ homes can be pretty impressive.

FACT #6: FIRST-TIME BUYERS LOSE MONEY WHILE THEY WAIT ON THE SIDELINES. First, renters typically pay more state and federal income taxes than homeowners with a mortgage deduction. Renters are also losing the wealth they could be accumulating as they pay down their mortgage and as their home increases in value over time (as it surely will). Lastly, renters who wait to buy will lose money if interest rates increase by the time they finally act. Higher payments from higher interest rates represent money buyers could have kept if they had bought earlier. Conversely, if they were willing to spend that amount of money earlier, they could have bought more home.

FACT #7: HOMES SELL WHEN THEY’RE PRICED RIGHT AND SHOW WELL. When sellers make their home’s value obvious, they make a sale—it’s as simple as that. The facts are showing this. In Sonoma County we see investors coming back into the market.
… Have a great day!

Mirjam (707) 486-2638