Hot Off the Presses!! CDA, More House For Less Rates DROP! January 31, 2008
Posted by Patti Shawgo in Uncategorized.add a comment
I’ve written a lot on here about about CDA, but in the last couple of months, the program has not been as useful since their rates were higher than the market rate.
Today, CDA has caught up! 100% financing on one loan with 0 points is now 5.875% down from 6.75%! You can get a 3% grant with a 6.25% interest rate!
This is FABULOUS NEWS!!!
With Rates so Low, Is now the right time to Refinance? January 23, 2008
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Have you been waiting for rates to go down? You’ve gotten your wish. Interest rates are at levels we haven’t seen since 2004. But is now the right time to refinance?
You DEFINITELY want to look into refinancing if:
- You have an adjustable rate mortgage
- You have an FHA loan with a rate of more than 6.25% **more on this in a sec
You want to strongly CONSIDER refinancing if:
- Your current interest rate on your loan is at 6.5% or above
- You have a first and second mortgage and your property value has gone up either because of work you’ve done on the house or over time (even 10% can make a huge difference)
- You have a mortgage with with mortgage insurance and the value has gone up (again, even 10% can make a huge difference)
You DON’T want to refinace if:
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You plan on selling your home in less than a year
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You have one mortgage with no mortgage insurance and your rate is less than 6.5%
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You purchased your house in the last year, don’t have an FHA loan, and don’t think the value of your home has changed that much
**If you have an FHA loan, you are in a fabulous position, as you can do an FHA Streamline refinance. I talked a little bit about it in my post HERE. You can refinance to a lower rate without an appraisal, practically no other documentation, and extremely minimal cost.
How Much Difference Does 1% Make? January 21, 2008
Posted by Patti Shawgo in First Time Home Buyers, Interesting Stuff, Mortgage Stuff.add a comment
Rates are lowest they’ve been in 2 1/2 years and it’s a buyer’s market, meaning buyer’s can get some great deals on properties that sellers NEED to sell.
So how much of a difference does 1% really make to the home buyer? Let’s take a closer look.
About this scenario: We’re going to use an FHA 30 year fixed rate loan as an example, with a $200,000 purchase price. We’re also going to use easy, slightly rounded numbers for the sake of readability, and not consider taxes or insurance in the payments. 6 months ago the rate could be 7%, today you might be able to get 6%, both with 0 points origination/discount fees.
1. Lower Monthly Payment: Financed to the maximum FHA loan to value (97.75% of the sales price) a $200,000 sales price at 7% would be $1300.67, at 6% the payment is $1172.12 for a difference of $128.55 per month
2. Less Interest over the life of the loan: On that same loan, at 7% interest you would pay $272,736.74 in interest over the full 30 years if you were to never make any extra payments. At 6% interest you would pay $228,664.31 in finance charges, for a difference of a whopping $44,072.43! (a side note: these numbers sound scary, but is indeed what you pay if you keep a loan for 30 years, making extra payments drastically reduces this number as well!)
3. You can Afford More House: Suddenly you are paying more than a hundred dollars less for the same house. Let’s say you can afford the principal and interest payment of $1300. Now instead of being able to afford a $200,000 you can now purchase a house that is $222,000 and have a principal and interest payment of $1301 @ 6% interest.
So, say 6 months ago you could afford a $200,000 house, but the house you wanted was $250,000. Now, that house may have reduced their sales price, you can afford more, and now that house that seemed so out of reach 6 months ago can be yours. 1% can make a HUGE difference!
Understanding Loan Limits: Conforming, FHA, Jumbo, What’s it all mean? January 18, 2008
Posted by Patti Shawgo in Mortgage Stuff, Uncategorized.1 comment so far
In the Baltimore and DC metropolitan area, the FHA loan limit is at it’s current maximum for one unit properties, which is $362,790. There is currently a lot of talk about raising this limit in congress, this would really help people with subprime loans with higher loan amounts refinance. This would also open up a lot of houses in this area to be financed by FHA that cannot currently get FHA loans.
Don’t know what the FHA loan limit is for your area? Here is a great place to find out: https://entp.hud.gov/idapp/html/hicostlook.cfm?CFID=6417740&CFTOKEN=1115e20-000b65b8-3ce9-171e-b196-80f015600000
The other loan limit terms that you might hear and/or need to know about are conforming loan limits. A conforming loan means that it can be bought by Fannie Mae or Freddie Mac, the 2 largest investors on the secondary mortgage market. That limit is currently $417,000 for single family homes and has been at that number since January 2006. It’s interesting to look at a history of the conforming loan limit, in 2000 it was only $252,000.
Jumbo loans then, are “non-conforming” meaning they can’t be bought by Fannie Mae or Freddie Mac. Any loans that are over $417,000 fall into this category. There’s no industry specific limit on how high these go, but once you get over the $1-$1.5 million mark things become trickier.
Now when you hear those terms bandied about, you will be a little more aware of what they mean.
New Feature: Chat with Patti January 17, 2008
Posted by Patti Shawgo in Uncategorized.add a comment
You now have direct access to getting your questions answered about Maryland’s real estate and mortgage markets!
I am trying out a new feature that WordPress (the people I run my blog through) offers. Live Chat through Meebo! The cool thing is that you don’t have to sign up or download anything. See that box on the right hand column that says “Chat with Patti”? If you are on my blog and you see that I am online, you can simply send me a quick message and we are talking.
My only worry with this Meebo chat thing is that it will make my page take a little longer to load, so I am going to see how that goes. When I am in my office I will try to stay logged in and hopefully this will be a useful addition to my blog.
Mortgages Applications Up As Rates are Super Low! January 16, 2008
Posted by Patti Shawgo in Mortgage News, Mortgage Stuff, Uncategorized.2 comments
The Mortgage Banker’s Association is reporting that mortgage applications are at the highest level they’ve been in the last 4 years. A look at the chart above will show you why. As is oftentimes the case, when the stock market is not doing so well, interest rates tend to drop. That’s great news for people in ARM’s or who are able to get out of a higher mortgage insurance premium, or are at a higher rate.
Conventional loan rates are averaging right at 6% (this is if you have equity, not 100% financing). Better yet, if you have an FHA loan, you can do a streamline refinance, submit a very minimum of paperwork, get few closing costs, and get a lower monthly payment. FHA rates are at 6%, some days even less!
Is this a shameless ploy to get my readers to think about refinancing? Well….if it’s going to save you money in the long run, yes. I avoid talking about actual rates too much on this blog for just that reason, I don’t want to come off as too sales-ey, but if you are in a situation where it might make sense to refinance, now is the time to do it.
Get Free Financial Advice from Kiplinger’s Today & Jan. 25th January 15, 2008
Posted by Patti Shawgo in Events, Interesting Stuff.add a comment
To kick off the new year, Kiplinger’s is offering consultations with their usually fee only consultants today and on January 21st.
Just call 888-919-2345 or vist their website for this event at http://www.kiplinger.com/yourretirement/jumpstart/
Even if you don’t want to call, I highly recommend checking out the link for some great information about investing and retirement.
Single Family Home Prices Still Up for 2007 January 14, 2008
Posted by Patti Shawgo in Interesting Stuff, Local News, Real Estate.add a comment
The median sales price for the Baltimore metro area is still up for 2007 (through the 3rd quarter). Yes, it’s only up 1.7%, but the national average is down 2%, so let’s be thankful.
This is from data from the NAR, and here is the source: http://www.realtor.org/Research.nsf/files/MSAPRICESF.pdf/$FILE/MSAPRICESF.pdf
It’s interesting to look at the last few years, because wow! in hindsight, what were were thinking in 2004?? The average price went from $217,000 to about $265,000.
Also of note is that this is only through the 3rd quarter of 2007, and between the 2nd and 3rd quarter, there was a drop in median sales price. My guess is that there will also be a drop between the 3rd and 4th quarter when we get those number, making the total gain in price even more modest. Most people buy in the first 8 months of the year, so don’t look at that down trend as so surprising, or likely to continue in the same way.
Also….remember when you see numbers like this it is for the MEDIAN sales price. Those high priced houses are the ones that really tend to be sitting and then taking less than asking, dragging all the numbers down with it.
Will new consumer site from Realtors help buyer confidence? January 14, 2008
Posted by Patti Shawgo in First Time Home Buyers, Mortgage Stuff, Real Estate.add a comment
You may have already seen some new NAR (National Association of Realtors) commercials floating around touting this site. It is www.HousingMarketFacts.com.
There’s not a whole lot to the site, it’s basically 3 slides of information, links back to Realtor.com/0rg, and a smilely lady who walks into the page after you are on it for about 30 seconds.
It does have some good information, and while I think the NAR can tend to be a little on the overly optimistic side, it is important to remember that the sky is not falling completely in on the housing market, really. Of particular note are the links to areas of Realtor.org that are consumer accessible. Realtor.org is mostly a sight for Realtors and it does have some good data, these links get your directly into areas that are accessible by consumers. Otherwise, visiting Realtor.org can be tedious for the consumer as you can’t look at much, and don’t know what you can or can’t look at.
Take a minute and check out the site, it does have some really good facts to keep in mind. No matter what the market is like, if you are able to buy, being a home owner is financially better than being a renter. And, now is a buyer’s market, people! You can get some good deals and get into a house with equity.
Interesting to note, as I’ve been talking about FHA a bit more lately, is that of the measley 2 items on the “financing is available page,” one of the items mentions how FHA market share is expected to triple over the next 3 years. (my estimation is it’s going to be even more than that).
The second thing on the financing tab is a really cool link to Freddie Mac where you can see rates for the last 30 years. http://www.freddiemac.com/pmms/pmms30.htm
Most people who have looked into buying a house and gotten on the internet have made their way at some point to Realtor.com. It’s a good site to start a preliminary housing search, but you can’t get the actual addresses of the listings. Since there are plenty of sites out there that you can get the address, many people’s housing search quickly goes to another site. There are, however, some interesting tools that may be little know to the casual realtor.com visitor, and housingmarketfacts.com trys to show these to you. The most interesting being the neighborhood research and downloadable search tool.
Grant Programs & Credit Optimizing Workshops for Realtors & Home Buyers January 10, 2008
Posted by Patti Shawgo in Credit, Events, First Time Home Buyers, Interesting Stuff, Local News, Mortgage Stuff, Optimizing Your Credit, Real Estate.add a comment
I am going to be doing a workshop on grant/loan programs for first time buyers, as well as optimizing your credit score throughout 2008. The first workshop will be Saturday, February 2nd, 2008 at 11am, and should last about an hour and a half.
These workshops are geared for both home buyers and Realtors that want to get more information about federal, state, and local down payment assistance, closing cost grant and loan programs. You can find out about the different types of programs, what you need to do to qualify, and I will also have a special section on optimizing your credit score that is useful if you have a 700 credit score or no credit at all.
The workshops will be the first Saturday of every month at 11am at Granite Title in Greenspring.
Granite Title’s address is: Foxleigh Building Granite Title Associates, Inc. • 2330 W. Joppa Road Suite 107 • Maryland 21093
Questions and RSVP’s (suggested, but not required) to: patriciacshawgo@gmail.com.
