Courtesy of Inman News
Thursday, March 8, 2012
Snails in Idaho?
I wonder what the auditor from the Idaho Real Estate Commission would had to say about this situation.
Courtesy of Inman News
Courtesy of Inman News
Idaho's Shadow Inventory-It's a good thing!
I have been saying for months that I did not believe that Idaho's shadow inventory would be major. (Shadow inventory are homes that banks have foreclosed on but have not yet put on the market for sale.) Many areas have a huge amount that will negatively impact home values for months and maybe even years to come. But this graphic shows Idaho at one of the lowest rates in the nation. As Martha Stewart would say, "It's a good thing." At least I think that is what she would say!
Wednesday, March 7, 2012
Monday, March 5, 2012
Idaho Sellers:The Price of Your Home VS The Price of Happiness
I see a lot my Boise and Nampa sellers and past sellers in this timely article by Steve Harney of the KCM Blog.
I recently gave a presentation about the current real estate market to a group of home sellers in a city in the Northeast. That night, I explained to them that home values in their area were about to be negatively impacted by a surge of distressed properties entering their region over the next year. As I have often found to be the case, the homeowners were very receptive; many felt that they now had the information they needed to make a good decision with regard to pricing their home to sell in this market.
After the class that night, several of the homeowners came up to me to privately discuss their personal situations. One of these owners said something I will never forget. He shared with me that he had come to a revelation that night.
This particular homeowner had put his home on the market with plans to move to Florida, where his daughter and his infant grandson live. He missed his daughter very much and missed his grandson even more. He hated every passing day that he wasn’t able to “hold the baby in my arms and rock him to sleep”. That night at the seminar, he thanked me for reminding him of the reason he put his home on the market in the first place – he needed to rejoin his family. I was struck by the wisdom of his final words to me before he turned to walk away.
“I thought I was putting a price on my home. While I hold out– hoping to get a few more dollars, I am actually putting a value on my happiness.”
He adjusted his asking price that night and sold it three days later. Very soon, he will be able to rock his grandson to sleep in his arms, both of them happy and content.
I recently gave a presentation about the current real estate market to a group of home sellers in a city in the Northeast. That night, I explained to them that home values in their area were about to be negatively impacted by a surge of distressed properties entering their region over the next year. As I have often found to be the case, the homeowners were very receptive; many felt that they now had the information they needed to make a good decision with regard to pricing their home to sell in this market.After the class that night, several of the homeowners came up to me to privately discuss their personal situations. One of these owners said something I will never forget. He shared with me that he had come to a revelation that night.
This particular homeowner had put his home on the market with plans to move to Florida, where his daughter and his infant grandson live. He missed his daughter very much and missed his grandson even more. He hated every passing day that he wasn’t able to “hold the baby in my arms and rock him to sleep”. That night at the seminar, he thanked me for reminding him of the reason he put his home on the market in the first place – he needed to rejoin his family. I was struck by the wisdom of his final words to me before he turned to walk away.
“I thought I was putting a price on my home. While I hold out– hoping to get a few more dollars, I am actually putting a value on my happiness.”
He adjusted his asking price that night and sold it three days later. Very soon, he will be able to rock his grandson to sleep in his arms, both of them happy and content.
Friday, March 2, 2012
Former Idaho Home Owners Wait for a Second Chance
More than 4 million homes have been lost to foreclosure in the last six years, and many of those former home owners are now starting to ask: When can we buy again?
Many banks have guidelines that prevent them from issuing loans to people with a foreclosure or short sale in their credit history in some cases for as much as seven years. That also doesn’t factor in the damage foreclosures and short sales can do to a person’s credit score, and the work former home owners' will need to do to repair it so they’ll have a better chance at qualifying for financing again in the future.
Still, some former home owners, particularly those who foreclosed or did a short sale due to extenuating circumstances like a job loss or illness, are finding the wait may not be as long as they were once told.
"They're probably going to pay a little higher interest rate, but with rates so low, a higher interest rate of 4 percent is not a big deal," Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev., told the Associated Press.
The wait-time varies among lenders and government entities. For example, the Federal Housing Administration says former home owners with a foreclosure must wait three years before they can qualify, while Fannie Mae and Freddie Mac require a seven-year wait following a foreclosure.
As for short sales, sometimes these waits can be waived or drastically cut, depending on the borrower’s situation. FHA requires a three-year wait following a short sale, but it may waive that wait if the short sale was due to a job loss.
Also, for borrowers who can come up with a higher down payment on their next home purchase, they may also not have as long to wait. For example, Fannie Mae will reduce the wait from seven years to two years for borrowers who come with a down payment of 20 percent or more.
If you did a short sale and did not miss any payments you may also find some lenders willing to lend to you immediately. (However, many lenders will not talk to you about a short sale until you are behind on your payments, sort of counter intuitive to me.)
Many banks have guidelines that prevent them from issuing loans to people with a foreclosure or short sale in their credit history in some cases for as much as seven years. That also doesn’t factor in the damage foreclosures and short sales can do to a person’s credit score, and the work former home owners' will need to do to repair it so they’ll have a better chance at qualifying for financing again in the future.
Still, some former home owners, particularly those who foreclosed or did a short sale due to extenuating circumstances like a job loss or illness, are finding the wait may not be as long as they were once told.
"They're probably going to pay a little higher interest rate, but with rates so low, a higher interest rate of 4 percent is not a big deal," Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev., told the Associated Press.
The wait-time varies among lenders and government entities. For example, the Federal Housing Administration says former home owners with a foreclosure must wait three years before they can qualify, while Fannie Mae and Freddie Mac require a seven-year wait following a foreclosure.
As for short sales, sometimes these waits can be waived or drastically cut, depending on the borrower’s situation. FHA requires a three-year wait following a short sale, but it may waive that wait if the short sale was due to a job loss.
Also, for borrowers who can come up with a higher down payment on their next home purchase, they may also not have as long to wait. For example, Fannie Mae will reduce the wait from seven years to two years for borrowers who come with a down payment of 20 percent or more.
If you did a short sale and did not miss any payments you may also find some lenders willing to lend to you immediately. (However, many lenders will not talk to you about a short sale until you are behind on your payments, sort of counter intuitive to me.)
Thursday, March 1, 2012
Attention Idaho home buyers: HUD Increases Costs Effective April
I referenced this earlier, the cost of a FHA loan will be going up, if you looking to possibly buy Idaho real estate, right now is the time! Call or email me today!
In a move to increase their financial standing (and to get the FHA back into required capital requirements), on Monday, HUD announced their anticipated increases in the premiums they charge borrowers. Simply stated, the cost of borrowing is going up.
FHA loans, by design, are more liberal in their underwriting guidelines than most conventional loan products (in terms of credit, income ratios, required investment from the borrower, and maximum loan amount). HUD is not a lender. Rather, it is a federally-insured insurance company. They insure lenders against default on loans underwritten in compliance with their published guidelines. It is because of this insurance that lenders approve and close loans with more liberal guidelines.
As an insurance company, HUD charges two types of premiums on the FHA mortgages:
On a loan amount of $300,000, we are seeing an increased payment of $36.41, which doesn’t sound too bad. However, we know that home buyers buy homes comparing what their monthly payment will be after they close. This hike in payment is equivalent to borrowing an additional $7000. Starting next month, it’s as if the home became $7000 more expensive. What is the result? Buyers are going to have to pay more OR they’re going to have to offer less to the seller (to maintain the same mortgage payment they were comfortable with today). A $7000 lower offer is like another 2.5% decline of home prices. Not good for anyone.
Advice:
Sellers, price correctly and get into contract in March. (I have a great article on this coming in a day or two.)
Buyers, today is the cheapest mortgage you are likely to see in your lifetime (all things considered)! Get off the fence and buy NOW!
______________
P.S. – Rumors are strong that FHA is looking to reduce the allowable sellers’ concession from 6% to 3% in April as well. This move will have a huge impact on how much cash will be needed to buy (especially in places like NY with the NYS Mortgage Tax). Hurry—get in the game!
In a move to increase their financial standing (and to get the FHA back into required capital requirements), on Monday, HUD announced their anticipated increases in the premiums they charge borrowers. Simply stated, the cost of borrowing is going up.FHA loans, by design, are more liberal in their underwriting guidelines than most conventional loan products (in terms of credit, income ratios, required investment from the borrower, and maximum loan amount). HUD is not a lender. Rather, it is a federally-insured insurance company. They insure lenders against default on loans underwritten in compliance with their published guidelines. It is because of this insurance that lenders approve and close loans with more liberal guidelines.
As an insurance company, HUD charges two types of premiums on the FHA mortgages:
- The UFMIP (Up Front Mortgage Insurance Premium) will be raised effective April 1, 2012 from its current 1% to 1.75%. One advantage to the UFMIP is the fact that it is typically built into the loan amount and does not require additional cash outlay at closing. However, the increase in loan amount does impact monthly payment and cash flow.
- The MMIP (Monthly Mortgage Insurance Premium) will be raised 10 basis points on April 1, 2012 to cover the requirements of the payroll tax extension approved last year. This is a direct increase of 10 basis points in the borrower’s mortgage payment, and has the effect of a 10 basis point increase in interest rates. As a kicker, loans over $625,000 will be bumped 35 basis points from today’s levels effective June 1, 2012. This bump is substantial, as you can see in the chart below.
On a loan amount of $300,000, we are seeing an increased payment of $36.41, which doesn’t sound too bad. However, we know that home buyers buy homes comparing what their monthly payment will be after they close. This hike in payment is equivalent to borrowing an additional $7000. Starting next month, it’s as if the home became $7000 more expensive. What is the result? Buyers are going to have to pay more OR they’re going to have to offer less to the seller (to maintain the same mortgage payment they were comfortable with today). A $7000 lower offer is like another 2.5% decline of home prices. Not good for anyone.Advice:
Sellers, price correctly and get into contract in March. (I have a great article on this coming in a day or two.)
Buyers, today is the cheapest mortgage you are likely to see in your lifetime (all things considered)! Get off the fence and buy NOW!
______________
P.S. – Rumors are strong that FHA is looking to reduce the allowable sellers’ concession from 6% to 3% in April as well. This move will have a huge impact on how much cash will be needed to buy (especially in places like NY with the NYS Mortgage Tax). Hurry—get in the game!
Idaho Home Buyers Ride Perfect Storm!
When all conditions combine to make a perfect time to buy Idaho property, I call it the Idaho Home Buyer's Perfect Storm.
The first condition is the low, low prices of homes in the Boise-Nampa Metro Area. I am also seeing that the downward spiral in Idaho housing prices that we have been experiencing then past several years is starting to stabilize.
The second condition is historically low interest rates for Idaho homebuyers. These are rates we thought would never be seen again, they increase your buying power tremendously by lowering bowering costs and monthly payments.
Thirdly, FHA is scheduled to increase mortgage insurance premiums in April, you need to get that new home found now and your loan locked.
Don't be one of those who look back to March of 2012 and wish you had bought then! Contact me today, today's buying storm may do as the old refrain, March comes in like a lion and goes out like a lamb.
The first condition is the low, low prices of homes in the Boise-Nampa Metro Area. I am also seeing that the downward spiral in Idaho housing prices that we have been experiencing then past several years is starting to stabilize.
The second condition is historically low interest rates for Idaho homebuyers. These are rates we thought would never be seen again, they increase your buying power tremendously by lowering bowering costs and monthly payments.
Thirdly, FHA is scheduled to increase mortgage insurance premiums in April, you need to get that new home found now and your loan locked.
Don't be one of those who look back to March of 2012 and wish you had bought then! Contact me today, today's buying storm may do as the old refrain, March comes in like a lion and goes out like a lamb.
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