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Displaying blog entries 371-380 of 391

FICO Scores are VERY important these days!

Monday, November 24, 2008
by Liz Warren

How important are FICO scores these days? Extremely. If you are purchasing anything and need credit your FICO score will determine if you can get credit and what interest rate you'll pay. Credit scores range between 300 and 850.

Scores under 680 are on the fringe of scrutiny with lenders. Some will charge a much higher interest rate to borrow so it will cost you more in the end on your credit cards, your mortgage rate, and your car loan.

FICO scores come from a combination of your debt load, payment history, amount of credit you are using and other miscellaneous factors such as foreclosures or other debt defaults

A good resource to learn how to increase your FICO score and other questions about how this scoring works, go to www.myFICO.com

 

 

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New Restrictions on Condo Lending

Friday, October 10, 2008
by Liz Warren

If you are looking at condos in the Welches, Rhododendron, Brightwood and Government Camp areas you will need to know the new future lending requirements on Condo projects. This may affect Golden Poles, Thunderhead Lodge, Eidelweiss, Sno-Bird, Collins Lake and Grand Lodges, Fairway Estates, Clear Hills, and Shadow Hawk condo units.

Rules are coming down the pike that if investors own more than 49% of the units, in other words, if they are not owner occupied or second homes, the project may not qualify for convenetional financing.

I am not sure of trhe exact date this may happen but be advised that we may see many owner carried contract sales in the future.

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Even More HELOC issues

Wednesday, September 17, 2008
by Liz Warren

Many buyers of Mt. Hood properties in Welches, Government Camp and Rhododendron use HELOCS to obtain downpayments and purchases of second homes and investment properties. With a pinching off of HELOC funds, this could impact sales in our area.

Do you have a home equity line of credit? Well, be sure and check if you think you do because many banks are pulling these and notifying owners after the fact. Some homeowners are writing checks on these equity lines and finding their checks have bounced even before the notification.

Housing prices are adjusting downward all over the nation. Home Equity Lines of Credit are based on home valuations. Depending upon what state you live in, the amount of your total home debt can be 65% or 75% of your home value. The "home value" is determined by a computer model the banks use.

If you read the small print of your agreement the banks have a right to pull this at any time the home value reaches a certain amount and they can immediately freeze your ability to use this line of credit.

Turmoil in the banking industry will cause even further tightening of credit for Helocs over the next 24 months as they sort out the sub-prime mess and capital issues.  Just be aware that this instrument to gain funds may not be there for a while!

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Freddy Mac and Fannie Mae

Monday, September 8, 2008
by Liz Warren

Well, with the Feds bailing out these two institutions it means REDUCED RATES!

Buyers, take advantage right now because it may be the best possible senario with low rates and BIG inventories!

Recent rates have dropped to 5.875% for 30 year fixed!!!!!

Don't hesitate!

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FHA lending is changing this summer!

Monday, May 19, 2008
by Liz Warren

Many home buyers are going for FHA loans vs. conventional loans recently. In fact, over the past six months FHA lending has doubled!

Major changes are happening in FHA. The big difference will be in the insurance premiums and interest rates for the loans. If you are a high risk borrower your premiums will be higher and your interest rate higher. This of course is based on your FICO score (credit score). If you have a good FICO score you will pay a lower premium (currently 1.5% of the loan which is rolled into your total loan package)

Low FICO score will pay 2.25% fee

High FICO score could pay 1.25% fee.

Depending on your downpayment and FICO scores there are many variables with rates and fees. So, game has changed again. This is significant because the FHA program has been the same for nearly 75 years. This model is more in line withthe similar  PMI (private mortgage insurance.

In any case, look for new FHA rates to appear on the horizon. These changes will start this summer.

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EVEN MORE RULES COMING for INVESTOR LOANS

Thursday, May 8, 2008
by Liz Warren

Here is some more credit squeezing news. On August 8th of this year Freddie Mac is clamping down on invertor loans. The limit for multiple owner investment units will be a total of four vs. the ten they currently allow. Cash out refis on rental units will also be eyeballed closely with a high probability of higher interest rates.

An even larger looming problem is the PMI or private mortgage insurance issue. PMI is required when a downpayment is less than 20% of the total purchase price. Investor loans in declining or depressed markets will be completely out of luck, in other words, no PMI, no loan if less than a 20% downpayment. Shades of the 1980's! When I first started selling homes on the mountain we could not sell anything without at least 20% down because the lenders would not provide PMI for buyers in our area.

What does this mean as a buyer or seller in the markets of Government Camp, Rhododendron and Welches? So far we have not been declared a "distressed" or "declining" market for real estate sales so we have dodged that bullet. What it does mean is that there will be a shrinking pool of investment purchasers with credit restrictions and the probability of higher interest rates on those loans.

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Credit Crunch Changes The Game

Thursday, May 1, 2008
by Liz Warren

What will the credit crunch bring to today's market in the Welches, Rhododendron, Government Camp and Brightwood area?

1. Reduced equity lines of credit.

2.Removing subprime and Alt-A loans completely

3.Higher fees for loans that lenders do make.

Lending practices of the years 2002-2007 are over.

Results:

Builders will be building smaller homes.

Lenders will be lending much less money.

Buyers will be saving home and borrowing less.

Fewer buyers, fewer loan products, and higher loan costs create an even more competitive market for sellers and lowering  prices through that competition to sell.

 

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What about those JUMBO loans?

Monday, April 7, 2008
by Liz Warren

I read a recent article about Jumbo loans in California.  The temporary raised loan amount rate in the California market is $730,000 vs. $417,000 for our area. Lenders are reporting that it hasn't exactly helped the situation because rates on these loans are at least a point higher than stated rates on a 30 year fixed. In other words, if the rate quote is 6% for a 30 year fixed, a JUMBO loan, one over $417,000 locally would be around 7% and possibly more. Jumbo loans have had stricter qualifying conditions and good credit is a must.

These loans are sold to pensions funds and other secondary markets who are spooked from the sub-prime disaster. Therefore they are requiring tougher standards for the buyer qualification AND a higher interest rate. Well, the Californians are not rushing in to get these loans for new home purchases nor refinancing as the feds thought they would who raised the temporary limits to help things "move along".

We have seen the impact here in our local market from Government Camp to Welches and Rhododendron. The market above $500,000 has slowed substantially.  There have been three sales in the past seven months in the over 500K range for single family homes.

The Grand Lodges Condos in Government Camp are now closing and should produce several sales substantially over the barrier.

Agents in California feel it will take a year or so for Jumbo rates to come down. We'll see more movement, and sales when they do but until then, buyers will need great credit to even qualify for these Jumbo loans and count on at least 1% higher interest rates than the sub 417K conventional loans.

 

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New Home Valuation Protection Code

Wednesday, March 12, 2008
by Liz Warren

Ever hear of this? New York state attorney general Cuomo has come up with a proposal that Freddie Mac and Fannie Mae (the companies that buy most of the conventional loans) will be agreeing to. This Code will basically protect consumers from the "conflicts" where appraisers have been pressured into "over appraising properties-inflating values" which is one of the reasons we are in this mess of the housing/foreclosure market.

The requirements of the act are: that mortgage brokers cannot select appraisers, lenders cannot use "in house" staff appraisers and lenders cannot  use appraisal companies they own or control.

This takes the conflict out of the system and protects consumers. This is also one way  states may have slipped their toe into the Federally regulated bank, savings and loan, and credit union systems that are completely monopolized and regulated by the FEDS.

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HELOC FREEZE?

Wednesday, March 5, 2008
by Liz Warren

Many buyers of homes are familiar with HELOCS or Home Equity Lines of Credit. This has been a convenient way for homeowners with equity to borrow money against their homes for vacations, college expenses, home improvements, second homes, or just unexpected expenses. This convenient home ATM is going into "shut down mode" with the following big banks sending "freeze" letters out due to falling home prices in many areas of the country. Here is a list of some of the larger banks implementing this policy:

Countrywide

Bank of America - HELOC Freeze

Countrywide - HELOC Freeze

Chase - HELOC Freezes

CitiGroup - HELOC Freeze under review

National City - HELOC Freeze

Suntrust - HELOC Freeze

USAA Federal Savings - HELOC Feeeze

Washington Mutual - HELOC Freeze

The credit crunch is on and the impacts of this will be severe for many home sellers in our area. Our home values have not fallen as far as many parts of the country but this inconvenience will impact many second home buyers.

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Displaying blog entries 371-380 of 391

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