Singing to Market Your Listing
January 30, 2010 by Kaveh · Leave a Comment
I’m a member of the Real Estate Marketing Association (RMAToday.com) that meets once a week on Thursdays. This is a networking organization in which real estate agents present new properties to the market that are going to be on broker tour that day, discuss what their wants/needs are in regards to buyers and sellers and we also discuss what is going on in our industry. It’s a great way to start off your day and be able to network with other professionals in the real estate, mortgage lending, title, insurance industries.
On Thursday, one of the presenters was Dick Vesperman with Keller Williams in Danville. He was presenting a new property that was coming to the market. He is known for his unique way of presenting his properties. See the video below, sorry that it is out of focus.
Say What? A Simple Explanation Of The Federal Reserve Policy Statement
January 27, 2010 by Kaveh · Leave a Comment
The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.
In its press release, the FOMC noted that the U.S. economy “has continued to strengthen”, that the jobs markets is getting better, and that financial markets are supportive of growth.
There was no mention of the housing market’s strength. The last 3 statements from the Fed included that specific verbiage.
It’s the fifth straight statement in which the Fed spoke about the economy with optimism. This should signal to markets that 2008-2009 recession is over and that economic growth is returning to U.S. economy.
The economy isn’t without threats, however, and the Fed identified several in its press release, including:
- Credit remains tight for consumers
- Businesses are reluctant to hire new workers
- Housing wealth is down
The message’s overall tone, however, remained positive and inflation appears is still within tolerance.
Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to wind down its $1.25 trillion commitment to the mortgage market by March 31, 2010. This is noteworthy because Fed insiders estimate that the bond-buying program suppressed mortgage rates by 1 percent through 2009.
Mortgage market reaction to the Fed press release is, in general, negative. Mortgage rates are rising this afternoon.
The FOMC’s next scheduled meeting is March 16, 2010.
Exsisting Home Sales Drop in December
January 26, 2010 by Kaveh · Leave a Comment
Just one month after from blowing away Wall Street, December’s Existing Home Sales hit the skids, shedding nearly 17 percent and falling to a 4-month low.
Don’t be alarmed, though. The plunge was expected. And not just because Pending Home Sales cratered last month.
When November’s Existing Home Sales surged, it was clear to observers that an expiring $8,000 federal tax credit was the catalyst. At the time, the tax program was slated to expire November 30 and the looming deadline pushed a lot of would-be buyers from a December time frame into November.
The expiration date has a cannibalizing effect on December’s sales figures. It was only later that Congress extended the tax credit to June 30, 2010.
So, with home sales plunging in December, it’s no surprise that home supplies rose for the first time in 9 months. Home Supply is calculating by dividing the number of homes for sale by the current sales pace.
The national housing supply now rests at 7.2 months.
Despite December’s Existing Home Sales report appearing shaky, it’s actually terrific new for home buyers.
See, for the past few months, as housing has been improving, sellers nationwide have been bombarded by messages of “hot markets” and rising home prices by the media. Psychologically, a seller is more likely to hold firm on price if he believes the housing market is improving and now December’s data is deflating that argument.
This is why we say there’s always two sides to a housing story — the buyers’ side and the sellers’ side. And, usually, what’s good for one party is bad for the other. It’s what we’re seeing now.
Because of soft data like December’s Existing Home Sales, buyers may retake some negotiation leverage that’s been lost since Spring 2009, helping to improve home affordability and, perhaps, spur more sales.
FHA Dropping 90 Day Flipping Rule
January 15, 2010 by Kaveh · Leave a Comment
Good Morning,
Some good news for change in regards to loan guidelines. We hear that FHA is dropping its property flipping requirement today. It means we can originate FHA loans bought by investors immediately. They no longer have to hold the property for 90 days. No word on when it may be effective. I will keep you posted as we receive more information.
If you have any questions, please do not hesitate to give me a call.
30 Year Fix Hits All Time Low!
December 7, 2009 by Kaveh · Leave a Comment
Freddie Mac announced on Friday that the 30 year fixed rate mortgage dropped to an all time low of 4.71%. This is great news for home buyers and current home owners who can now lower their monthly carrying costs. Since early this year, with the help from the Federal Reserve, rates have continued to hover in the high 4’s to low 5’s for 30 year mortgages. The Federal Reserve is purchasing $1.25 trillion in mortgage backed securities (MBS) to help artificially keep mortgage rates low in the hopes of stimulating the housing market and the economy. From all reports, it has worked as we have seen the housing market stabilize and the economy slowly getting better. These funds to purchase MBS is set to run out in the first quarter of 2010. Read more
More Changes From Fannie Mae
November 24, 2009 by Kaveh · Leave a Comment
Fannie Mae recently came out with some more changes to their guidelines and this one is pretty big. The guideline change has to do with a borrower’s debt to income ratios, also known as DTI. Effective December 12, 2009, the maximum DTI that a borrower can have is 45% regardless of what the automated underwriting systems, AUS, comes back with. Currently, we have been able to receive Approve/Eligible on loans with debt to income ratios above 50%. But with these new changes, we are stuck with 45% or less. If you have DTI ratios between 45% to 50%, you may be able to get an approval with compensating factors. These would be higher credit scores, larger down payment, months of reserves, etc. These are at the discretion of the underwriter.
These do not currently affect FHA, VA or Freddie Mac loans. But when one makes a change, the rest usually follow. I would not be surprised if FHA, VA and Freddie Mac make similar changes soon. Read more
First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.
What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
First Time Hombuyer Tax Credit Extended
November 5, 2009 by Kaveh · Leave a Comment
The First time homebuyer tax credit extension and expansion passed the Senate yesterday and The House voted 403-12 today to extend this credit, known as HR 3548, into mid 2010. It is expected that the President will sign the bill into law by Friday.
First time homebuyers can potentially receive up to $8,000 in tax credit if they are in contract on a home by April 30, 2010 and must close by June 30th. The original credit was set to expire on November 30th of this month. Along with the credit for first time homebuyers is an expansion to current homeowners. Current homeowners can receive up to $6,500 in credit if they have lived in their principal residence for at least the past five years.
Income limits were also increase to $125,000 for single filers and $225,000 for joint filers. They are both up from $75,000 for single filers and $150,000 for joint.
Does Having an 800 FICO Score Matter?
September 21, 2009 by Kaveh · Leave a Comment
Since 2007, mortgage lenders have clamped down in many areas of underwriting, but none more so than in the area of credit scoring.
Minimum FICO levels are up 120 points or more and conforming mortgage lenders now levy large fees on borrowers whose scores are below 740.
Keeping your credit scores high is a worthwhile goal, but it’s not always easy to do – especially when you don’t know the ins-and-out of how the credit scoring system works.
The Wall Street Journal wrote a terrific piece on credit scoring. It’s full of helpful, relevant tips for home buyers, homeowners, and everyone else.
Aside from covering the five basic components of a credit score — shown at right – the piece provides insightfukl advice on credit-related topics including:
- The difference between a “hard inquiry” and a “soft inquiry”
- Why paying for your credit report is a foolish use of funds
- Why it doesn’t matter if you have an 800 FICO
The article also talks about the optimal balance a person should carry on their credit cards to get the biggest FICO boost.
Credit scores determine your mortgage rate. Therefore, do what you can to keep your scores high. Follow the tips in the Wall Street Journal article and lean on public resources like myFICO.com.
Having good credit can be a real money-saver. Month after month after month.
Q & A About the $8k First Time Homebuyer Tax Credit
August 13, 2009 by Kaveh · Leave a Comment
I’ve been getting a lot of questions lately about the federal government’s $8,000 tax credit for first time home buyers. Here are some basic question & answers. If you have any specific questions not answered here, please feel free to give me a call.
Q. What is the credit?
A. The first-time homebuyer credit is a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.
The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.
Q. How much is the credit?
A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 ($8,000 if you purchased your home in 2009) for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. The full credit is available for homes costing $75,000 or more ($80,000 if purchased after Dec. 31, 2008, and before Dec. 1, 2009).
