The Best Time to List Your House? TODAY!

You may have heard that the housing market is softening. There is no doubt that buyer traffic has decreased. There are fewer purchasers in the market than there were last month and at this time last year. What you may not have heard, however, is that there is still a severe shortage of listing inventory in many regions of the country.

In a recent interview discussing the housing market, First American’s Chief Economist Mark Fleming put it simply:

“The biggest challenge is really the availability of supply.”

When we look at available inventory numbers released by the National Association of Realtors (NAR), we see that the actual number of homes for sale has decreased in each of the last five months.

What does this mean to you as a seller?

The best time to sell is when there is less competition. That guarantees you a better price and fewer hassles in the transaction.

Bottom Line

If you are thinking of selling your house this year, the best time to put it on the market might be right now. Call me today and let's discuss your options, 661-510-5370

2008 vs. Now: Are Owners Using Their Homes as ATMs Again?

Are homeowners using their homes as ATM's again? This is an easy way to say are consumers taking out all the equity out of their homes or have they learned from the past?

Over the last six years, we have experienced strong price appreciation which has increased home equity levels dramatically. As the number of “cash-out” refinances begins to approach numbers last seen during the crash, some are afraid that we may be repeating last decade’s mistake.

However, a closer look at the numbers shows that homeowners are being much more responsible with their home equity this time around.

What happened then…

When real estate values began to surge last decade, people started using their homes as personal ATMs. Homeowners would refinance their houses and convert their equity into instant cash (known as “cash-out” refinances). Because homes were appreciating so rapidly, many homeowners tapped into their equity multiple times.

This left homeowners with little-or-no equity left in their homes, so when prices started to fall many homeowners found their houses in a negative equity situation (where the mortgage amount was greater than the value of the home). When some of these homeowners saw that there was no value left in their houses, they just stopped paying their mortgages altogether.

Banks eventually foreclosed on those homes and the foreclosures drove prices down even further and put more homes in the negative equity category. This cycle continued, leading to the worst housing crash in almost one hundred years.

What’s happening now…

Again, Americans are seeing their home equity grow. Today, over 48% of all single-family homes in the country have over 50% equity, and yes, some families are tapping into that equity. However, this time around, homeowners are not doing making irresponsible decisions. According to the latest information from Freddie Mac, the total equity being “cashed out” is a fraction of what it was leading up to the crash. Here are the numbers:

First Step in Buying a Home

Pre-Approval: Your 1st Step in Buying a Home

I In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing if the dream home you have been watching is within your reach. Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website: “It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.” One of the many advantages of working with a local real estate professional like myself, is that we have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow: Capacity: Your current and future ability to make your payments Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash Collateral: The home, or type of home, that you would like to purchase Credit: Your history of paying bills and other debts on time Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted. Bottom Line Many potential home buyers overestimate the down payment and credit scores necessary to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so. Don't hesitate to give me a call with any questions at 661-510-5370

First Time Home Buyer? Don't Miss Out On The Tax Credit!

Directly From My Lenders Mouth!

Mike Meena

Augusta Financial

661-290-2970

We have been touting a first-time buyer tax credit for over a year now that helps buyers qualify for loans and it also gives them a TAX CREDIT in addition to the normal tax write off.  The maximum loan amount in Los Angeles, Orange and Ventura Counties is $585,713.00 and it can be used on FHA, Conventional, VA and USDA loans.  A first-time buyer is defined as someone who has not owned a property in 3 years.  You would be eligible if your household income meets the following criteria:

• LA County $108,120.00 for a 1-2 person household and you can earn up to $126,140.00 if you have a household of 3 or more people.
• Orange County $125,160.00 for a 1-2 person household and you can earn up to $146,020.00 if you have a household of 3 or more people.
• Ventura County $119,880.00 for a 1-2 person household and you can earn up to $139,860.00 if you have a household of 3 or more people.
• call  for other county limits

Now to the good part!  A buyer that is buying a property for $470,000.00 with 3.5% down using FHA financing that meets the criteria above will get a mortgage credit of approximately $335.00 per month.  They will also get their usual write off in addition to the mortgage credit.  So this buyer will get to write off $16,000.00 instead of the usual $20,000.00 and the $4000.00 they don't write off will be a tax credit!  The other great thing about this is the $335.00 mortgage credit will reduce their debt-to-income ratios which will allow them to qualify easier! 

So if you have a first-time buyer and they are saying, "Oh no, my payment is too much," then you throw the following info at them:

$470,000.00 Purchase Price 3.5% down rate 4.375% (5.54APR) No Points
 

Principal and Interest	$2301.85
Property Taxes	$490.00
Homeowners Insurance	$90.00
Homeowners Association ???	$0.00
PMI	$326.56
Total Payment =	$3208.41

Here is how this breaks down in a nutshell: $3208.41 - $335.00 = $2873.41.  Just this little tax credit makes a 4.375% rate look like a 3.09% interest rate! 

YES the money is a straight TAX CREDIT!  Not a tax deduction!  A TAX CREDIT!  This will help a lot of buyers, that could not qualify before, qualify now!  The fee is $300.00 and it is the best deal running out there!  Please let me know if you have a first-time buyer that is struggling to qualify or crying about higher interest rates! 

Interest rates rose a little more over the last week.  The 30-year mortgage has had 101 months below 5% in the past 60+ years!  I hope these help you if you are shopping around:

• 30-year fixed conventional 1st Mortgage with 20% down - 4.750% (4.813 APR). Loan amounts up to $453,100.00 = $2363.58
• 15-year fixed conventional 1st Mortgage with 20% - 4.250% (4.352 APR). Loan amounts up to $453,100.00 = $3408.57
• 5/1 ARM 1st Mortgage -  20% down - Fixed for 5 years and then becomes variable - 4.125% -  (4.276 APR) Loan amounts up to $453,100.00 = $2195.95
• 7/1 ARM 1st Mortgage - 20% Fixed for 7 years and then becomes variable - 4.375% - (4.528 APR) Loan amounts up to $453,100.00 = $2262.26
• 10/1 ARM 1st Mortgage - 20% Fixed for 10 years and then becomes variable - 4.375% - (4.528 APR) Loan amounts up to $453,100.00 = $2262.26
• 30-year fixed 1st Mortgage FHA loan 3.50% down - 4.375% (5.539 APR). Loan amounts up to $453,100.00 = $2301.85 + $326.56 PMI = $2628.41
• 30-year fixed 1st Mortgage VA loan 0% - 4.375% (4.318 APR). Loan amounts up to $453,100.00 = $2262.26
• 30-year fixed 1st Mortgage Jumbo loan 20% down - 4.625% (4.639 APR). Loan amounts up to $3,000,000.00 = $15,424.19

All of the above are based on a 740 credit score.  Rates are subject to change without notice.

If you have any questions, don't hesitate to contact me directly at 661-510-5370 or call Mike Meena at 661-290-2970.

Getting Pre-Approved For A LoanShould Always Be Your First Step

In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

Capacity: Your current and future ability to make your payments
Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
Collateral: The home, or type of home, that you would like to purchase
Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line
Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so. Call me today and let's sit down and discuss your options, Wendy Gundry 661-702-4767.

'Servicing Your Real Estate Needs At A Higher Level'

You Can Save for a Down Payment Faster Than You Think!

Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long it would take to save for a down payment in each state.

Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.

By determining the percentage of income spent renting in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.

According to the data, residents in Ohio can save for a down payment the quickest in just under 3 years (2.44). Below is a map that was created using the data for each state:

What if you only needed to save 3%?

What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3%-down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes possible in a year or two in many states as shown on the map below.

'Serving your real estate needs at a higher level'

661-702-4767

Be Thankful You Don't Have to Pay Your Parents' Interest Rate!

Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with affordability. In the first quarter of 2018, rates have increased from 3.95% up to 4.45% and experts predict that rates will increase even more by the end of the year.

The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home. Don’t let the prediction that rates will increase stop you from purchasing your dream home this year.

Let’s take a look at a historical view of interest rates over the last 45 years.

With the above graph I think we should be thankful that we can still get a better interest rate than your mom or dad when they purchased a home, a lower rate than your grandparents did 40 years ago, and a better interest rate than your brother or sister 10 years ago.

If you are interested in making a move contact me today!

'Servicing your real estate needs at a higher level'

661-702-4767