Category

Interest rates

Oct 16
0

To Buy or not to Buy…

By | Buyers, Economy, Interest rates, Investing in Real Estate, RE by the numbers, RE Investing, Wine Tasting | No Comments

Operation Twist is the economic policy from the FED:  at their last official meeting in August, the policy making committee decided to keep interest rates low until 2013 …

This is good news for buyers… There is a time window to benefit from low interest rates… Time to get once’s financial house in order…

Some might think that waiting to buy is a better option, they decide to stay on the sideline… Smart idea???

Well depending on your situation: if you rent a home you pay for someone else’s  mortgage. Why rent when you can buy? All the first time home buyers I have been working with recently end up paying less in mortgage than in rent…

Will home prices go down further? All Real Estate is local. While the higher end in Santa Rosa/Sonoma County is expected to loose some more value in the coming time, the lower prices homes have been fairly stable in the last years.

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But what if home prices are coming down a little further? You never know when the market has hit bottom until it goes up again. At that point there will be a lot more competition.In the mean time: you have to live somewhere, might as well pay your own mortgage and take advantage of the tax benefits when owning a home…

Bottom line: the current market in Sonoma is a great market for buyers: although the inventory is low, there are great homes coming on the market all the time. There is no such thing as the perfect home. But right now there is the luxury of not having to worry about interest rates going up dramatically.

Last note: in Netherlands most rental homes are owned by the government, our first home after we got married was government owned. Home ownership is becoming more common but not like in the USA. It’s called the American Dream for a reason.

Have a great weekend and enjoy harvest season in Sonoma County: the first weekend is the 13th Annual Wines and Food Affair

Mirjam

Nov 13
0

Facts and numbers to keep perspective!

By | Economy, Financial news, Interest rates, RE by the numbers, RE Investing | No Comments

Some people have compared the current financial turbulence to the 1930’s and other ‘black days’. Some facts to know:

  • More than 1000 banks closed in 1930 – only 14 U.S. banks have been taken over in 2008
  • There are 76 million households in the U.S. that own their home – 24 million of these homes are free and clear
  • There are 52 million homes with mortgages – 97.2% of these are not in foreclosure, 93.8% of these homes are current on their payments

On a sobering note:

  • Over 20% of homeowners with a mortgage owe more than their home is worth
  • 40% of all foreclosures are non-owner occupied

How did we get here?
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Resale numbers – the above does not include new home sales.

Sources: Wall Street Journal / Moody’s Economy.com / RealtyTrac / NAR / Forbes

Do you see the problem and thus the predicament we’re in? Something had to happen one way or the other. Of course no one wanted it to be this bad. Let’s see what’s going to happen the coming time.  In the mean time, Pat Kitano has a great way of keeping us informed –

In the mean time, it’s an excellent time to buy real estate!

Mirjam

Mar 19
0

Yep, he did it again!

By | Buyers, Economy, Interest rates, Mortgage | No Comments

Mr. Bernanke is a very busy man nowadays. Working weekends to make the J.P. Morgan Chase & Co/Bear Stearns Cos deal happen and a 1/4 point rate cut this Sunday is unprecedented. And then yesterday an other rate cut for the short-term interest rates with the 0.75 percent cut. This means that the federal funds rate, which banks charge each other for loans, has been lowered six straight times over six months, driving it down to 2.25 percent from 5.25 percent.

The Fed not only pushed its benchmark rate to the lowest point since late 2004, it also cut the discount rate by 0.75 percent to 2.5 percent. That’s the rate the Fed charges banks and brokers that borrow directly from it.

Some of us have worries about inflation and rightfully so. However, all and all for now, this is good news. And the reason to mention the news above is that some people who did sign an adjustable rate mortgage that will reset this year might be better of that they expect.

Should you be in that situation, take our your papers and look how the mortgage will change, based upon which index/rate. Especially if you house does not have the same market value as is had when you bought it and refinancing will be difficult. Look at what your mortgage will do, it might be not that bad…

Should you have difficulties finding the info in the note, don’t hesitate to call your Realtor or you lender and have him/her help you. They will be happy to do so. (I will…)

Have a great day, it might turn out better than you think!

Mirjam (mirjam@c21alliance.com)

Nov 07
0

Buyers beware

By | Buyers, Interest rates, Mortgage | 5 Comments

So you got pre-approved for a loan a few months ago and are home shopping on your leisure. Inventory is high (this morning we had 3182 active listings in Sonoma County), you have reason to take your time. Just a warning: it might be good to talk to your lender again and find out whether the loan program you got pre-approved on is still available under the same terms. In talking to lenders (Denise is on a trip this week) I do hear over and over again that a lot of programs are not available anymore.

Banks are tightening lending standards for home buyers, even those with good credit, loan officers report the increase in stricter mortgage underwriting standards  due to economic uncertainty, reduced secondary market liquidity, and less of an appetite for risk, according to the survey.

Even for prime mortgages, the terms are tightened in the prior three months for people with the best credit records. That was up from about 15 percent in the previous survey in July. About 60 percent of banks said they tightened standards on home mortgages classified as “nontraditional,” up from 40 percent in the previous survey. Should you be in the market for a new home, make sure you do your homework. Stay in touch with your lender and even more, stay in touch with your Realtor. They are there to help you. 

But don’t worry, mortgage rates are still very reasonable and there are still plenty of programs available, just make sure you are educated about today’s market.

Have a great day!

 mirjamnew.jpg  Mirjam

Oct 12
0

Do you know a VET?

By | Buyers, Interest rates, Sonoma County info | 2 Comments

TheVeteran’sAdministration http://www.homeloans.va.gov/ offers vets great opportunities to purchase homes. Do you know a vet? or you a vet? If so, call me and find out how you can qualify with little or no down on VA programs. Let me do the paperwork for you….Read the following information from American Banker.

New Campaign for Veterans’ Loan Program
American Banker (10/12/07) P. 3A; Johnson, Hilary
The number of outstanding mortgages guaranteed by the Department of Veterans Affairs’ Home Loan Guaranty Program fell to 2.5 percent at the end of this year’s second quarter from 3.2 percent in 2005, reports the Mortgage Bankers Association. The agency is undertaking some improvements to make the loan program more efficient and to eliminate some of the red tape that made lenders and real estate agents hesitant to deal with such loans in the past, and Don Munro of the agency’s St. Paul, Minn.-based regional loan center says the efforts are beginning to attract the attention of lenders that have not participated in the program in years. Computer system updates allow lenders to go online for veterans’ certificates of eligibility, and appraisals also are reviewed on the Web. To minimize paperwork for servicers and enhance loan monitoring, the agency will launch its VA Loan Event Reporting Interface System in early 2008. Meanwhile, Congress is considering legislation that would boost the maximum guarantee on home-purchase loans to $625,000 from 25 percent of the conforming loan limit; and the agency may seek additional help in updating lending guidelines and enabling it to refinance problem loans.