Moving-Up? Do it NOW not Later

A recent study revealed that the number of existing home owners planning to buy a home this year is about to increase dramatically. Some are moving up, some are downsizing and others are making a lateral move. Another study shows that over 75% of these buyers will, in fact, be in that first category: a move-up buyer. We want to address this group of buyers in today’s blog post.

There is no way for us to predict the future but we can look at what happened over the last year. Let’s look at buyers that considered moving up last year but decided to wait instead.

Assume they had a home worth $300,000 and were looking at a home for $400,000 (putting 10% down they would get a mortgage of $360,000). By waiting, their house appreciated by 13.8% over the last year (national average based on the Case Shiller Pricing Index). Their home would now be worth $341,400. But, the $400,000 home would now be worth $455,200 (requiring a mortgage of $409,680).

Here is a table showing what additional monthly cost would be incurred by waiting. If you have questions about current mortgage rates, be sure to contact one of our preferred lenders below.

-Steve and Sandra

Steve Hill and Sandra Brenner
Windermere Real Estate/FN
Seattle-Northwest
122502 Greenwood Ave N, Suite A
Seattle WA 98133
call/text: 206-769-9577
email: stevehill@windermere.com

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Check out these useful links:

BrennerHill.com
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Our Preferred Lenders

George Runnels
Washington First Mortgage
WaFirstMortgage.com
call/text: 206-604-4545

Jackie Murphy
Cobalt Mortgage
CobaltMortgage.com
call/text: 425-260-6834

 

 

Posted on March 1, 2014 at 1:00 pm
Steve Hill and Sandra Brenner | Category: Real Estate | Tagged , , , , , , , , , , , , , ,

When Will Mortgage Rates Hit 5%?

The big question for homebuyers is when interest rates will begin to rise to the 5% mark. The effect of a rise in mortgage rates could be a dramatic increase in the monthly mortgage payment when purchasing a home. In an article last week, HousingWire quoted two different sources regarding this issue.

Most experts are projecting that rates will rise when the Fed decides to taper the purchase of bonds which has acted as a stimulus to the housing market by keeping long term mortgage rates at historic lows.

In the article, Sterne Agee’s managing director and chief economist Lindsey Piegza pointed out:

"Federal Reserve officials said they might reduce their monthly bond buying program from $85 billion 'in coming months' as the economy continues to improve."

The article also quotes Frank Nothaft, chief economist with Freddie Mac:

“By the end of 2014, rates will probably approach and perhaps touch 5%. A reason we see the uptick in rates is that I do think some point the Federal Reserve will start to taper and scale back its very active purchase on long-term Treasuries and mortgage-backed securities.”

Rates will hit 5% sometime in 2014. It might be better to buy sooner rather than later.

Why not buy now?  Buyer competion for homes during the holidays, combined with great interest rates make it a great time to buy!

If you are considering a home purchase, give us a call, text or email. Let us negotiate the best price for your new home!

?-Steve and Sandra

Steve Hill and Sandra Brenner
Windermere Real Estate/FN
Seattle-Northwest
122502 Greenwood Ave N
Seattle WA 98133
call/text: 206-769-9577
email: stevehill@windermere.com

Check out these useful links:

BrennerHill.com
Best In Client Satisfaction
Seattle Real Estate Statistics
Windermere Housing Trends Newsletter

Our Preferred Lenders

George Runnels
Washington First Mortgage
WaFirstMortgage.com
call/text: 206-604-4545

Jackie Murphy
Cobalt Mortgage
CobaltMortgage.com
call/text: 425-260-6834

Windermere, Real Estate, Northwest, Seattle, Mill Creek, Greenwood, Ballard, Ballard, Broadview, Home, Purchase, Sell

 

Posted on November 30, 2013 at 3:00 pm
Steve Hill and Sandra Brenner | Category: Interest and Mortgage Rates | Tagged , , , , , , , , , , , ,

Mortgage Rates Fly Holding Pattern Just Over 4 Percent

by Matthew Graham

Mortgage rates continued flying their recent holding pattern just over 4 percent.  Most lenders' rate sheets were essentially unchanged compared to yesterday's latest.  Additionally, we never saw enough bond market movement during the course of the day to justify any mid-day changes.   The most prevalent Conforming  (best-execution) has been pinned to 4.125% with very little change in associated closing costs for a week now.

Because most lenders adjust rates in 1/8th (0.125%) increments, the next time the best-execution quote moves lower, 30yr fixed rates will be back at 4.0%.  Some lenders are offering that now, but it's not the norm, and may involve additional closing costs. 

So is it possible that we'll see a more broad-based move down into the high 3's?  In a word, yes, but caveats apply.  The concept of a "holding pattern" is carefully chosen because rates are indeed circling the runway, waiting for permission to land.

That permission can only be granted by economic developments that are "negative enough."  Specifically, markets would need to see more evidence that the labor market is weak enough to unequivocally delay the Fed's timeline for reducing its bond buying program–one major factor in lower rates overall.

The surest bets when it comes to such data are the once-a-month Employment Situation Reports, such as last Tuesday's.  Due to shutdown rescheduling, the next report is coming up next Friday!  Even tomorrow, we'll get several pieces of data that will help decide the fate of the "circling plane," including the ADP Employment numbers which attempt to forecast next Friday's numbers.  The FOMC releases a policy announcement in the afternoon, and although traders agree we're not likely to see any policy change that hurts rates, it could still make for an afternoon where rates are actually higher or lower than the past afternoons.

 

Loan Originator Perspectives

 

"Still within a confined range, safe to say tomorrow will bring a bit more to the table however the recent trend prevails. Floating appears to be safe, however with rates at multi-month lows, locking must be considered. Tomorrow's FOMC is key to any volatility, not expecting anything groundbreaking. Float on!" –Constantine Floropoulos, Quontic Bank

"Consumer confidence readings released today were the lowest since April, likely not a surprise given recent DC dysfunction. The 5 year Treasury auction came in as expected. Net result was a range bound, but slightly higher day for MBS. Tomorrow's Fed Minutes should provide interesting details on their perspective on shutdown's impact on the economy. Any pro/con tapering hints will certainly impact rates' future direction." –Ted Rood, Senior Originator, Wintrust Mortgage

"Rates remain the the low 4% range (check with your Loan Originator on your specific scenario). Lock if you like. You can not lose by locking a rate you are comfortable with." –Bob Van Gilder, Finance One Mortgage

"I think the big question is will rates dip below 4%. I feel they will and possibly next week. We'll have to see, but the economic data I believe will confirm a slowing economy which should push rates down. Home sales numbers continue to disappoint. That's the last thing the FED wants." –Mike Owens, Partner, Horizon Financial Inc.

Curious about current mortgage rates? Give us a call, text or email. We would love to talk with you about your mortgage rate questions!

-Steve and Sandra

Steve Hill and Sandra Brenner
Windermere Real Estate/FN
122502 Greenwood Ave N
Seattle WA 98133
call/text: 206-769-9577
email: stevehill@windermere.com

Check out these useful links:

BrennerHill.com
Best In Client Satisfaction
Windermere Housing Trends Newsletter

Our Preferred Lenders

George Runnels
Washington First Mortgage
WaFirstMortgage.com
call/text: 206-604-4545

Jackie Murphy
Cobalt Mortgage
CobaltMortgage.com
call/text: 425-260-6834

Posted on November 1, 2013 at 3:00 pm
Steve Hill and Sandra Brenner | Category: Mrtgage Rates | Tagged , , , , , ,

A lesson on loan pre-qualification

Hunting for a new home? Pre-qualification can be an essential component of your home search. Here’s why.

Mortgage pre-qualification. Why does it matter? Let me see if I can frame it this way…

Has ever happened to you? You’re out with friends and decide to grab dinner. There’s a new place in town you’ve heard is fantastic.  Rave reviews, amazing cuisine.  Everyone’s excited. 

You drive over, pay for parking, and sure enough, there’s a crowd. The atmosphere is perfect, the menu looks incredible.  Mouths water, you can’t wait. You step up to put your name on the list and the hostess says: 

“Name for your reservation?”

Reservation?  I had no idea they were required!”  Awkward apologies.  They’re booked and you’re out of luck.  Not even a seat at the bar.  It’s embarrassing.  Your friends are disappointed.  So much for your recommendation.

It’s not so different when you’re thinking of buying a home and you haven’t spoken to a mortgage professional in advance.  You can search, find the right home, negotiate a contract… then uh-oh. You find out you aren’t qualified.

If you’re thinking about beginning a home search soon, let me help you avoid disappointment.  You'll get a picture of your credit score, the type of rate you’d pay, plus get the chance to correct any errors or problems on your credit report.  A pre-qualification letter can have a direct impact on your ability to negotiate, too.

Below are the names of two lenders we know and personally trust.

Steve Hill and Sandra Brenner
Best In Client Satisfaction
Windermere Real Estate
BrennerHill.com
Windermere Housing Trends Newsletter
call/text 206-769-9577

Our Preferred Lenders

George Runnels
Washington First Mortgage
WaFirstMortgage.com
call/text: 206-604-4545

Jackie Murphy
Cobalt Mortgage
CobaltMortgage.com
call/text: 425-260-6834

 

Posted on October 5, 2013 at 11:02 am
Steve Hill and Sandra Brenner | Category: Home Loan and Mortgages | Tagged , , , , ,

Home Buyers: Window of Opportunity Still Open

The Fed recently announced they would continue their current pace of purchasing bonds until the economy was stronger. This bond purchasing program is the reason that mortgage interest rates are at historic lows. Rates began to increase over the last several months just on the anticipation that the Fed would announce that they would be reducing the level of bond purchases last month. When that didn’t happen, rates actually decreased (4.50 to 4.37).

That was great news for any buyer in the process of purchasing a home. However, this window of opportunity is expected to close in the very near future as most experts expect the Fed to taper the bond purchasers in December. Even Ben Bernanke, Chairman of the Fed, suggested that the Fed could still scale back the stimulus this year. He stated:

"If the data confirms our basic outlook, then we could move later this year.”

Where will mortgage rates head in 2014?

The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors have each projected that the 30 year fixed rate mortgage will have interest rates in excess of 5% by this time next year. The average of their four projections is 5.3%. The table below shows the impact this will have on the monthly principal and interest payment on a $250,000 mortgage:

Looking for a great home loan lender? Check out our recommendations below!

Steve Hill and Sandra Brenner
Best In Client Satisfaction
Windermere Real Estate
BrennerHill.com
call/text 206-769-9577

Our Preferred Lenders

George Runnels
Washington First Mortgage
WaFirstMortgage.com
call/text: 206-604-4545

Jackie Murphy
Cobalt Mortgage
CobaltMortgage.com
call/text: 425-260-6834

 

 

Posted on October 3, 2013 at 11:00 am
Steve Hill and Sandra Brenner | Category: Mortgage Rates | Tagged , , , , , , , ,

Mortgage Rates after the Bernanke Announcement

Last week, Bernard Bernanke startled many by announcing that the Fed will not wind down their bond buying program right now. The program is part of an overall stimulus package geared at bringing back the national economy. The Fed’s purchase of these bonds over the last few years has driven mortgage rates to historic lows. The assumption that there would be a reduction in bond purchases has caused 30 year mortgage rates to spike upward over the last few months.

Surprisingly, Bernanke revealed the Fed will continue bond purchasers at the current pace. What happened and what does it mean to mortgage interest rates?

What would have happened if they reduced bond purchases?

According to Bankrate.com:

“The Fed could have caused rates to shoot up this week if it had announced the tapering of its bond-purchasing program.”

Why did the Fed decide not to start winding down bond purchases?

Moody’s Analytics reported that there were three reasons:

  1. Subpar economic data
  2. Tighter financial conditions
  3. Uncertainty surrounding fiscal policy

What does this mean to a buyer applying for a mortgage?

Those at Bankrate.com explain:

“For now, borrowers have dodged another spike in rates. The Fed’s announcement might even cause rates to drop in coming days, says Paul Edelstein, director of financial economics at IHS Global Insight.

‘Mortgage rates should fall back — not massively, but to some extent,’ he says.

That doesn’t mean homebuyers and homeowners should wait for lower rates, mortgage professionals say.

Eventually, once the Fed lets the mortgage market and the economy start walking on their own, rates will probably head back to the 5 percent or 6 percent range, says Scott Schang, manager for Broadview Mortgage Katella in Orange, Calif.”

When will the Fed begin winding down bond purchases?  

According to an article in the Wall Street Journal:

“Federal Reserve policy makers decided this week that the economy isn’t in the right place for them to start winding down their bond-buying program. By the time they meet in December, it might be.

The decision to not start winding down the bond-buying program now was close… The economy only needs to get a little bit better over the next few months for the central bank to get its nerve back. That should be an easy bar for the economy to clear.”

Bernanke himself has not ruled out that the Fed could still scale back the stimulus this year. He stated:

“If the data confirms our basic outlook, then we could move later this year.”

Bottom Line

Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, IL had a great quote in the Bankrate article:

“Remember that rates go up like a rocket and fall like a feather.”

Still, Bankrate.com itself probably put it best: Grab the gift before it’s gone!

Questions about home loans? Give us or one of our preferred lenders a call today!

Steve Hill and Sandra Brenner
Best In Client Satisfaction
Windermere Real Estate
BrennerHill.com
call/text 206-769-9577

Our Preferred Lenders

George Runnels
Washington First Mortgage
WaFirstMortgage.com
call/text: 206-604-4545

Jackie Murphy
Cobalt Mortgage
CobaltMortgage.com
call/text: 425-260-6834

Posted on September 23, 2013 at 2:07 pm
Steve Hill and Sandra Brenner | Category: Mrtgage Rates | Tagged , , , , , , ,

30-year mortgage rate steady at 4.57%

WASHINGTON (AP) — Average U.S. rates on fixed mortgages held steady this week, hovering near two-year highs. But rates could change quickly next week when the Federal Reserve addresses its bond purchase program.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan was unchanged from last week at 4.57%, just below the two-year high of 4.58% reached Aug. 22.

The average on the 15-year fixed mortgage held at 3.59%. The two-year high of 3.60% was hit on Aug. 22.

Long-term mortgage rates have risen more than a full percentage point since May, when Chairman Ben Bernanke first signaled that the Fed could reduce its bond purchases this year. The purchases have been intended to keep long-term loan rates extremely low.

Most analysts expect the Fed to decide at its meeting next week to scale back its bond purchases.

Even with the recent gain, mortgage rates remain low by historical standards. But higher rates have spurred some homebuyers to close deals quickly and could slow the market's momentum if they continue to rise.

Mortgage rates have been rising because they tend to track the yield on the 10-year Treasury note. The yield has climbed 1.3 percentage points in the past four months as bond traders have anticipated that the Fed will slow its bond buying.

The 10-year note's rate was 2.92% on Wednesday, down from 2.97% Tuesday but up from 2.89% a week earlier.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.

The average fee for a 30-year mortgage rose to 0.8 point from 0.7 point. The fee for a 15-year loan was steady at 0.7 point.

The average rate on a one-year adjustable-rate mortgage fell to 2.67% from 2.71%. The fee declined to 0.4 point from 0.5 point.

The average rate on a five-year adjustable mortgage dipped to 3.22% from 3.28%. The fee was unchanged at 0.5 point.

Curious about mortgage rates or refinancing? Give us a call, we are happy to help.

Steve Hill and Sandra Brenner
Best In Client Satisfaction
Windermere Real Estate
BrennerHill.com
call/text 206-769-9577

Our Preferred Lender:
George Runnels
Washington First Mortgage
WaFirstMortgage.com
call/text: 206-604-4545
 

Posted on September 17, 2013 at 3:00 pm
Steve Hill and Sandra Brenner | Category: Mortgage Rates | Tagged , , , , , ,

Alternative Ways to Come Up With the Down Payment on a Home

To successfully purchase a home today, you will need a down payment of at least 3.5 percent of the purchase price. Gone are the days of no down payment alternatives, down payment assistance and seller-offered programs to come up with the money needed to buy a home. Instead, let's look at the five ways you can come up with a down payment to seal the deal.

1. Gift Money: Gift money is simply that — a gift from family or documented close relationship. The giftor needs to provide a gift letter and paper trail for the monies they are gifting for the benefit of the buyer. In other words, they'll have to provide a bank account showing that they had the ability to gift the money. In short, gift monies cannot be funds sitting at home in a safe.

2. 401(k)/Retirement Loan: Typically, borrowed funds for a down payment are a no-go, but the exception is a 401(k) or equivalent retirement account (or current home equity line). If you can borrow money from your 401(k) for your down payment, this is accepted for obtaining a purchase mortgage loan. Note: Depending on the terms of your loan, this could be counted as a liability and factored into your debt-to-income ratio.

3. Sale of a Good: Believe it or not, you can sell your recreational vehicle and use the net proceeds from the transaction as your down payment. Let's say that you decide to sell your motorcycle for $10,000. You'll need to provide the full bill of sale — as well as the bank statement depositing those funds, matching the bill of sale — to your mortgage lender. Same goes for any other recreational vehicle, or other item that "makes sense." The key is as long as it's plausible and passes the litmus test and you can paper trail the monies from start to finish, you should have no problem using those monies for the house purchase.

4. Trust Funds, Settlement Awards, etc.: If you come into a chunk of change via an inheritance, settlement, lottery winning, trust fund disbursement, family buyout, even a gambling victory, all of these monies can be used for the down payment as long as the sourcing of the monies is fully documented from A to Z with no stone left unturned. Matching of the amounts of monies used to the original deposits will be required when it comes time to secure the loan.

5. Line of Credit: Where a down payment lacks, enter strength in income. You can take out a line of credit or a personal loan, deposit the full funds into your bank account and after two months, the funds will be eligible for use in the transaction.

While a down payment is needed to purchase in the current real estate market, a prudent homebuyer should also have plans for having available funds for closing costs. The same out-of-the-box strategies listed above can also be used to procure funds for closing costs.

Closing costs run at about 3 percent of the purchase price, on average. So the total funds to close would be 3 percent of purchase price plus 3.5 percent down.

Do your homework. If you don't have a down payment for a house, or your down payment is coming from more than one source, make sure that you talk to a lender upfront so they can help you navigate the best way to properly support and document your monies used. Doing this on the front end will save you from wasting time creating and gathering unnecessary paperwork.

If you would like further information on home loans, give our preferred lender, George Runnels of Washington First Mortgage a call at 206-604-4545.

For information on homes for sale in your market, give us a call or text at 206-769-9577, we are always ready to get to work for you!

Steve Hill and Sandra Brenner
Best In Client Satisfation
Windermere Real Estate
call/text 206-769-9577
BrennerHill.com

 

Posted on September 13, 2013 at 2:00 pm
Steve Hill and Sandra Brenner | Category: Down Payment | Tagged , , , , , , ,

As Interest Rates Rise, So do Home Prices

It may seem counterintuitive, but historically, as interest rates rise, so do homes prices. Check out the graph below. Every dramatic mortgage increase has also given rise to home prices. Waiting to buy will cost more than an increase in interest rates, the home will cost more too.

 

 

 

 

 

 

 

 

 


Steve Hill and Sandra Brenner
Best In Client Satisfaction
Windermere Real Estate
BrennerHill.com
call/text 206-769-9577

Posted on September 5, 2013 at 3:00 pm
Steve Hill and Sandra Brenner | Category: Real Estate Prices and Mortgage Rates | Tagged , , , , , ,

Should I Wait for Interest Rates to Come Back Down?

Above is a graph of the movement of the 30 year fixed mortgage rate since the beginning of 2012.

Some buyers are waiting to see if interest rates will come back down before making a decision about buying a home. Though no one can guarantee where rates will be in a few months, we don’t believe waiting is a good strategy.

Most experts believe rates may actually move higher. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will continue to climb.

With home prices increasing and interest rates projected to also increase, the cost of buying a house could quickly increase rather dramatically.

If you are searching for today's best rates on home mortgages, give George Runnels at Washington First Mortgage a call, he can find you the best terms for new or refinancing a home loan. 206-604-4545

Curious about interest rates and how they can affect your purchasing power? Give us a call or text to learn more.

Steve Hill and Sandra Brenner
Best In Client Satisfaction
Windermere Real Estate
call/text 206-769-9577
BrennerHill.com

Posted on September 3, 2013 at 1:39 pm
Steve Hill and Sandra Brenner | Category: Mortgage and Interest Rates | Tagged , , , , , , , , ,