Home Prices Rebounding With Low Mortgage Rates

Over the course of several months, home prices in many markets have been rebounding with the consistent level of low mortgage rates. The National Association of Realtors data has shown five consecutive months of home price increases through July 2012. This past week, the S&P/Case-Shiller National Home Price Index showed a 1.2% increase during the second quarter of this year. It is obvious that the housing market is recovering at a modest but steady pace as mortgage rates continue to remain affordable, as well as, attractive.

FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates remained firm this past week with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%, all available with 0.7 to 1% origination fee for borrowers who have maintained a record of good credit.

Lending guidelines remain strict for home purchase loans and traditional mortgage refinances. Borrowers must qualify per employment, income and asset requirements and need to provide documentation as proof. After examining and verifying the information in the loan file, lenders often request additional information in order to make their decision for an approval or denial.

The Home Affordable Refinance Program, HARP, is available through the end of 2013 for underwater borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. With the removal of loan to value caps, loans above 125% LTV have been increasing since June when it became possible for lenders to securitize these loans.

However, many lenders still have strict overlays on HARP which has made it difficult for many borrowers to refinance. HARP requirements and mortgage rates differ from lender to lender and require borrowers to actively seek which one will give them an approval and the best deal. The fastest results can be obtained with an online inquiry where lenders are willing and available to assist borrowers who receive a response within minutes and without the need of a social security number.

The FHA streamline refinance is, in many ways, the FHA version of HARP. This refinance is available for all FHA borrowers and, with no cash out, does not require an appraisal or other documentation. This works well especially for underwater borrowers or those who have a deduction in income. Now, for borrowers who have FHA loans that were endorsed prior to June 1, 2009, the FHA streamline has a reduced upfront mortgage insurance premium of .01% and annual mortgage insurance premium of .55%.

This reduction was done to entice more borrowers to obtain an FHA streamline at today's low, affordable mortgage rates, thus reducing the cost of homeownership in order to prevent further foreclosures or defaults. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%. FHA still offers several mortgage purchase programs that have low down payment requirements, easier credit qualifying and all the long standing benefits that FHA mortgages have had in place for years.

Although FHA closing costs (APR) are high because of various FHA fees and the upfront front mortgage insurance premium, FHA allows borrowers to add this amount to the mortgage loan or use seller concessions in accordance with guidelines. FHA mortgages can be easily obtained through an online inquiry where approved FHA lenders are available to help borrowers obtain their goals.

Current jumbo mortgage rates also remained stable this week with jumbo 30 year fixed mortgage rates at 4.250%, jumbo 15 year fixed mortgage rates at 3.125% and jumbo 5/1 adjustable mortgage rates at 2.250%. Borrowers are required to have excellent credit in order to receive these low jumbo mortgage rates with 0.7 to 1% origination fee. Jumbo mortgages are necessary in higher cost areas where the price of property exceeds the loan limits of conforming and FHA mortgages. Often, guidelines can be strict and require substantial funds for larger down payment and reserve requirements.

Without a secondary market since the housing crisis, lenders generally keep these loans within their own portfolio. Even though it is considered risky, many lenders are re-entering the jumbo loan market because it is also profitable. This move is increasing competition which is making some lenders offer flexibility with guidelines. Borrowers who are in need of jumbo mortgages should shop around for the lowest jumbo mortgage rates and best deal being offered.

Towards the end of last week, MBS prices (mortgage backed securities) started to increase which is good for mortgage rates. Mortgage rates depend on MBS prices and move in the opposite direction. Some data released was not favorable with investors. The Commerce Department reported that demand for U.S. goods fell 3.4% in July which was the most in eight months. The Conference Board's Index indicated a decline to 60.6 in August which is the biggest drop since October and below expectations.

Jobless claims were flat and Chicago PCE Manufacturing came in below expectations at 53.0. The Commerce Department reported that consumer spending rose 0.4% in July, second quarter GDP was revised higher to 1.7% and new orders for manufactured goods increased 2.8% in July. The biggest event last week was Fed Chief Bernanke's speech which indicated possible further monetary easing to boost the economy which investors are now anticipating to see happen at the Fed meeting which starts September 12th.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.


Written by Ed Ferrara
September 6, 2012

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Your Home-buying Strategy

Buying a home is both exciting and sometimes stressful...whether you're a first-time homebuyer or an expert at it. The key to reducing the stress and successfully finding the home that matches your wants, needs, and budget is to have a home-buying strategy.

A home-buying strategy serves to keep you focused, in line with your goals, and on financial track. It can function much like a marketing strategy does for a company. It contains the important tasks, outlines your objectives in buying a home, your must-haves in a home, your financial budget, your move-in timeframe, location, desires, and more.

It may sound like a lot of work but if you take the time to put together a home-buying strategy and then share it with your real estate agent, you'll find that the clear goals you have will bring you closer to finding exactly what you're looking for and, likely, in a shorter period of time.

Putting together your home-buying strategy: In previous columns, I've written about getting organized for your move by organizing a binder that holds your vital paperwork and any materials that you'll immediately need during the moving process.

Organizing your home-buying strategy works in a similar way. You'll start by taking inventory of the home you currently live in. This gives you the opportunity to note both the pros and cons. Write it all down. Then write down your must-haves, would-love-to-haves, and absolutely-nots. You can write a list on notebook paper and place it in a three-ring binder and share it with your agent. In today's digital era there are many highly useful tools and apps to help you with house hunting. The creative and social website, pinterest.com is wonderful for saving website links and photos to various boards that you organize in categories. Even if you keep digital files, also keep the binder handy as your agent will give you lots of paperwork and having it all in one place will be a big relief when it comes time to find a particular document.

Seek out financing. Do this before you start to physically go out and look for homes. Sure, seeing lots of different homes can be fun (for some people) but seeing homes that you don't qualify for is a lesson in frustration for all. Be realistic and be informed by getting the information you need from a mortgage broker who can get you pre-qualified.

Create categories in your binder. Separate sections with tabs and label them things like: budget, favorites, neighborhood, comps. This is where you will place the notes you take during your house hunting. The "budget" section clearly has the defined price point that you are comfortable with. Surprisingly, some buyers start their shopping without giving careful consideration to this and they wind up frustrated because they're not certain how much home they can afford. The "budget" section also includes other expenses that go along with owning a home such as amount of savings for household repairs and, perhaps, new home furnishings.

Bring along a small camera, video recorder or your smartphone to capture your own quick snapshots that you can print out and put in the "favorites" section of your binder. For the "neighborhood" section, be sure to take a few photos of parks or other areas in the community that make this neighborhood and location a good potential match. Again, there are apps that can also do this on your computer but I find both the use of a physical binder and digital tools to be the most effective. Sometimes you just need to see and hold the photo or papers in your hand.

In the "comps" section, you'll place the comps that you receive from your agent. Sometimes buyers will toss this information away thinking they'll remember the details. However, it's best to keep any comps you receive to review it again later when you're making your ultimate choice. Yes, there is lots of paperwork but it serves a good purpose.

Having all that paperwork and your digital apps at your finger tips will provide you with a solid and effective home-buying strategy that allows you to focus on finding the home you're looking for rather than searching for papers and photos you've misplaced. Also, later when you're contemplating, referencing the photos and notes that you've taken will help tip the scale and help you choose the home that's right for you.


Written by Phoebe Chongchua
Published by Realty Times

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Searching For Your New Home

You want a home. There are houses for sale. How hard can it be to find the right fit? For anyone who has house hunted before, you know the answer. It can be a time-consuming and difficult process if you don't know where to start.

In order to get started in the right direction, it's paramount that you have a good idea for what you're looking. Make a wish list that includes everything from your neighborhood preferences and budget to housing amenities.

"What if I don't know what I want?" you ask. There are buyers out there that just aren't sure if they're in the market for a condo or a single-family home. They don't know if they want to be near downtown or out in the 'burbs. If this sounds like you, then your agent can be a big help.

They can show you a few different options, explaining the pros and cons of each. Hopefully, this preview session will help you make a firm decision on the direction you're headed.

Next, learn how to navigate your local MLS. In today's technology age, it's all about previewing a house online before you take the time to go on a showing. Just because a house meets the criteria you've set forth for your agent doesn't mean it's a house you'll want to see in person.

Realtor.com is a good place to start. They display all the listings for your area, searchable by bedrooms, square foots, bathrooms, zip codes, price range, and more.

Has your agent sent you listing info containing an MLS (Multiple Listing Service) number? You should be able to input that number on the MLS website to take you directly to that particular listing.

Better yet, have your agent sign you up for daily or weekly email updates. They can send you links to newly listed homes that fit within your given wish list criteria.

Finally, have an open mind. Some houses look stellar on paper (online). They appear to be your dream home. Once you see them in person, however, they simply don't measure up.

The opposite can be true for houses as well. A house may look shabby and run-down online (perhaps due to bad photos or bad decorating), but in person you realize the neighborhood is perfect and the house sturdy. All it needs are some cosmetic fixes.

Don't keep second guessing yourself. If from the beginning you have a solid plan on what you want, you'll be more likely to make a decisive move when the time comes. Waiting too long could mean losing out on a home you really want.

Being realistic about your wants and budget is a good way to make the house hunting process a whole lot smoother. Keep in mind that there may not be theperfect home, but there will be a home that is right for you.


Written by Carla Hill
August 29, 2012

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

What Do You Buy When Nothing is Perfect?

How do you decide what to buy - whether to buy - when nothing's perfect?

Today's "dream home" emphasis on buying real estate makes it tough for buyers whose wish list and budget do not match. If you have designer tastes and a fixer-upper budget, should you buy now, or wait until you can afford more?

That question is simple to ask. Buyers should always ask and answer this question before they start the dream home search. The problem is that this simple question has a very complex answer which is all about you. I've been answering it by raising relevant issues and topics in the 600 plus articles written for this column, "Decisions & Communities," and I can always see more considerations…and more articles to write.

The real answer: Only you know what to buy and if you should buy.

To prepare yourself and your partner to answer this question with foresight - not wish you had in hind sight - there are strategies to consider:

When prices are going up, strategize.

The urgency to jump into the market before real estate is financially out of reach, must be weighed against the reality that prices often reverse themselves at some stage. Decisions regarding this financial concern should include considerations like the following:

• The "what goes up, must come down" pattern is no longer true for all neighbourhoods, particularly choice urban and recreational locations.
• Factor in the cost of where you'll live while you wait, and how you'll stay ahead of inflation. Calculate how to realistically save more money toward the purchase.
• Create a Plan B in case prices do not come down when you want them to.

Set a budget that expands real estate choices.

Making sure you "tick off" all the items on your wish list, but don't end up "house rich, cash poor" can be a challenge. Get tough, to get ahead: Before you view any houses or condominiums, put your financial ducks in a row, so nothing will get in the way of negotiating a deal when you find "it":

• Get your credit in order. You can check your credit rating with the main credit companies for free. Correct errors, and there will be errors, since no one cares about the accuracy of this record but you. You know about paying off credit cards and any debt you can to achieve top borrowing power, so do it.
• Search out a mortgage broker experienced at maximizing borrowing power while minimizing borrowing costs. Time spent here will save you thousands over the years ahead.
• Make sure you know why you "must have" the "must haves." Often fads and trends influence this list. Concentrate on buying what's going to be in and what can be inexpensively up-dated to follow new trends, rather than paying for renovations that are already fading from fashion. Pare the "must have" list down to "absolutely must haves" - a very short list which will probably include a specific location. With fewer limiting criteria, you'll have more possibilities to choose from. Then, create a "value" list of features and benefits that will add value through expanded use, income potential, cost reduction, or other factors of relevance to you. Keep track of these details when viewing, so comparisons can be accurate.
• Create a budget to cover all the costs of buying and expenses of ownership in the first year. A real estate professional will know how to crunch these numbers so you're clear on how much cash you'll need on closing to cover legal fees, adjusted costs like property taxes, and expenses heating, and utilities for the upcoming year. Provide your buying agent with a list of ownership costs you want to know for each property, so you can determine value and, eventually, use these figures to decide on an offer price.

Adapt to buy

If you walk into a house or condominium unit and feel you're home, put in an offer. If you don't have this immediate "dream home" reaction, you may still discover this is an ideal property for your needs, and a great investment.

• By totalling up "value" features and benefits, you will find real estate to love, and transform into a dream. Make enough profit on this real estate, and you can afford a true dream home on your next buy.
• Buy the best location you can afford. Ideally, the least house on the best street within your budget for the greatest appreciation in value over the shortest time. The same is true for condos, a lesser unit in the best condo, in the best location you can afford.
• Place the greatest weight on features and benefits that cannot be changed like location, including sun orientation, and things that are expensive to change like square footage. Look for bad decor and sloppy housekeeping since these can reduce the number of interested buyers and keep the price down. Be aware of superficial "staging" and its stripped down approach that makes rooms look larger and everything look newer.
• Buy the neighbourhood first. Decide on who you're going to live with and where you'll spend your time shopping. School and workplace issues are important. Find out what redevelopment is planned for the area. Many lovely neighbourhood shopping areas are threatened by "big box" development.

Discovering your dream home can be expensive. If you get emotionally attached to the real estate before you own it, you can lose your negotiating toughness and spend more than necessary. This can also lead to drastic overspending reactions if there are multiple offers.

Pay as little as possible, but remember that there are other cost factors to build into the offer including closing date, what is included in the price, and what the owner will pay for (survey, repairs, taxes, etc.). Make sure you have a thorough home inspection to reveal even deliberately-hidden problems with wiring, plumbing, and other expensive to repair elements.

Concentrate on the dream of home ownership, rather than the cosmetic "staged" appeal of a particular house or condominium, and you won't have your dream turn into an expensive nightmare.


Written by PJ Wade
August 21, 2012

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Confident Home Buying: Is This The House For Me?

Buying a house is likely the single largest investment you'll make and, like a good marriage, if it's the right one, it may last a lifetime. But how can you be confident in your home buying, especially if you're a first-time buyer? With so many homes to choose from, how do you know if this house is the one?

Sounds like a dating question. And, coincidentally, using some of the same techniques used to determine if you're marrying the right person may also help you decide which home is the best for your needs. These days more buyers are coupling up–-buying homes together (even if they're not in a relationship) to offset the cost and be able to afford more.

You've heard of buyers' remorse and you know you sure don't want it. Sometimes fearing buyers' remorse can actually lead to buyers' inactivity. They become afraid and so they do nothing. They shop, they see, they even put offers in but in the end, they don't close. If you're a serious buyer, you don't want to get stuck in a cycle of looking and never owning.

So, how can you be confident that the home you're buying will meet your needs? Start with some basic guidelines. Make a list of your must-haves, needs, and wants. These are truly three different categories. Yes, some things you list may overlap but after your list is started, you'll begin to see what really matters to you. Sometimes buyers will be shopping for a home with a pool, but when they finally make a list they realize that money is very tight and the added cost of heating a pool will be too much of a drain. So they revise their home-buying desires and start house-hunting all over again. It would've been far more effective to have considered this from the start.

Next, study the home or apartment that you're currently living in. What are the positive aspects of it? Are there things about the place you live in now that you absolutely can't stand? Taking stock of what is working and what isn't in your current home provides a good blueprint for the things you should consider when searching for your next home. Remember to be honest. Sometimes we tend to forget the bad things about a home due to its sentimental value. If you look at your current home with a critical eye, you'll know which areas caused a big headache and then you can be sure you don't buy another with the same problem.

For instance, maybe the home needs a lot of fixing up and you and your spouse barely survived the remodel without tearing each other apart. You might then want to search for homes in much better condition to limit the fixing up. Our minds have a wonderful way of forgetting the bad, once the bad is over. But, trust me, you'll remember once you're back in the same scenario again.

Do your homework and get everyone's feedback. Unless you're buying a home alone, you should spend time meeting with those who will be living in the home to discuss what's important. Sounds obvious...yes, but guess what? A lot of times Buyer One and Buyer Two don't even talk about what's really important to each other until they start searching for homes. Then they realize how truly different their views and expectations are and see the necessity to compromise a little. Time is better spent reviewing and discussing first. That way, an agent can make sure the properties being shown are in line with everyone's desires.

Finally, plan ahead. Especially if you're moving a family or you're moving in with someone else. Use a synchronized calendar, like Google, to help map out all the meetings and showings. There will be lots of important meetings to attend and if you can't get the necessary buyers there, the process will be stalled. Without the necessary buyers present, you can't be confident the home will satisfy. Plan. Schedule. Commit. This will assure that the home-buying process will be a success.


Written by Phoebe Chongchua
August 17, 2012

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Home Builder Confidence Improves as Mortgage Rates Stay Low

As mortgage rates have continued to stay low, builders' confidence has improved for the fourth consecutive month in August according to the National Association of Home Builders/Wells Fargo Housing Market Index. Increasing 2 points to 37, the index is at its highest level since February, 2007. This report is a survey of builders' outlook for single family homes sales and expectations of sales for the next six months.

In addition to this index, Building Permits increased 6.8% as reported by the U.S. Census Bureau and Department of Housing and Urban Development and was at the highest level since August, 2008. Numbers going forward are looking positive for builders with the real estate market showing signs of recovery and affordability even though it still remains fragile.

This past week, FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates remained steady with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%, all available with 0.7 to 1% origination fee. To obtain these low mortgage rates, borrowers must have good credit and the qualifications needed for approval. Home purchase loans and regular mortgage refinances require documentation and verification of employment, income and assets.

On the other hand, HARP (Home Affordable Refinance Program) offers underwater borrowers the chance to refinance without the need of an appraisal or other documents. Eligibility requires that the borrower have a mortgage that was sold to Fannie Mae or Freddie Mac prior to June 1, 2009. HARP mortgages have been on the increase since the expansion of the program that includes all underwater mortgages with the removal of loan to value caps. While some borrowers may find obtaining HARP difficult, this should not be the case. All borrowers can inquire online about HARP where there are numerous lenders available to accommodate all types of circumstances.

With FHA still offering low down payments and easier credit qualifying, there remains continued concern with their exposure to risk and rates of foreclosures. Nevertheless, FHA loans remain a major player in the mortgage industry and continues to have low mortgage rates and favorable refinancing options. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%. To assist the insurance fund, FHA does have high closing costs (APR) due to the upfront mortgage insurance premium and other FHA fees, but borrowers will find that these can often be added to the loan amount.

For home purchase loans, seller concessions will sometimes cover the bulk of these fees. Despite any negativity, FHA's latest offer is the FHA streamline refinance with no cash out for borrowers who have loans that were endorsed prior to June 1, 2009. Without an appraisal or other documentation, eligible borrowers can refinance quickly to the low FHA mortgage rates being offered at this time. Volume for the FHA streamline has been high enough for lenders to turn away any borrower who is not already a customer. With a larger number of FHA approved lenders available, online inquiries have become a popular way to obtain this FHA refinance.

Jumbo 30 year fixed mortgage rates increased by .125% this past week and are now at 4.250%. Jumbo 15 year fixed mortgage rates are at 3.125% and 5/1 adjustable mortgage rates are at 2.250%. Excellent credit is required in order to receive these low jumbo mortgage rates with 0.7 to 1% origination fee. These loans require full documentation for employment and income for both outside employment or self employed.

Asset statements must show enough available funds for the higher down payment and additional month of reserves that are required. Jumbo mortgages are becoming more competitive as more lenders are entering this market. While these loans are considered risky, they are also profitable for lenders who usually keep them within their portfolio. With more lender product offerings for jumbo mortgages, borrowers may find there is more flexibility when considering an approval. Obtaining lender requirements and mortgage rates in advance will help borrowers find the best deal when shopping for a jumbo loan.

Mortgage rates were at risk of rising most of last week as MBS prices fell after better than expected economic data was reported. MBS prices affect mortgage rates which move in the opposite direction. The preliminary August index for Consumer Sentiment rose to 73.6 which was the highest level since May according to the Thomson Reuters/University of Michigan report. U.S. leading economic indicators rose 0.4% in July according to the Conference Board.

The Consumer Price Index was flat for July while Core CPI, minus food and energy, was up 0.1%. Industrial Production for July increased 0.6% and the August Empire state dropped to -5.9 (the first time below zero since October, 2011). The big news was Retail Sales for July which rose 0.8% which was much better than expected. July PPI rose 0.3% and Core PPI increased 0.4%. Adding to this, data from Europe was better than expected with increased GDP data from Germany and France which sent investors back to risky assets and the stock market higher.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.


Written by Ed Ferrara
August 22, 2012

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Buyers: Making the Right Choice

There are so many different homes to choose from during the buying process. How can you be sure to make the right choice?

From condos, downtown neighborhoods, suburbs, and country homes, there's a perfect fit for every buyer.

To make the best decision you need to be sure to really give time to your decision making process. Yes, your gut can take you in the right direction, but don't be one of the many buyers that falls prey to listening only to their hearts, ending up biting off more than they can chew.

Some homes take more work than others. This goes double for older homes. The same can be said for many foreclosed houses. The price tag might be appealing or you might love the styling of the home, but keep in mind that much of a home's value is actually in its condition.

This is why it is imperative to have an inspection done on any home you are considering buying. Additionally, you should have a clause in your contract that states if the inspection comes back unsatisfactorily that you, the buyer, have the right to end the contract to buy.

Different homes also comes with different lifestyle factors. Some buyers love the idea of having everything within walking distance. They like spending their extra time meeting friends for dinner and drinks or perusing the latest art exhibit. Could a condo be a good fit? It's a definite possibility.

Homeownership comes with its share of time intensive responsibilities. Lawns need upkeeping. Repairs need made. A condo can give you the location you desire without all the extra maintenance you'd find with a single-family home. That means extra time for the things that really matter to you!

Condos, while low maintenance, however, can also have their downsides. You will share walls, common areas, and amenities with neighbors. If you are an extremely private person, then condo living may not be for you.

Do you prefer a more isolated setting? Many people love the idea of country life. Just keep in mind that the further you are from people, the further you are from grocery stores, hospitals, and restaurants.

A suburban lifestyle has gained popularity over the last 20 years. Cities expanded to welcome their growing populations that wanted, and could afford, newer homes with their own nearby shopping centers. School systems can be very good and most areas boast lovely street designs thanks to urban planning.

The real key is to decide what lifestyle is best for you and your family. Once you've decided this, you'll be able to zero on the best location. Next, be sure to consider more than just the price tag of a home. Consider upkeep costs, area taxes, needed repairs, and even future salability. Do your due diligence and you're sure to make the right choice!


Written by Carla Hill
Published by Realty Times

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com