Jumbo loans making more sense…

Rich people are getting mortgages cheaper than you

Les Christie |  @CNNMoney | November 12, 2013 | link

Rich homebuyers can now get mortgages cheaper than pretty much everyone else.

In an unusual twist, lenders are offering rates on jumbo mortgages that are more than a quarter of a percentage point lower than those on the conforming loans backed by Fannie Mae and Freddie Mac. The government-run agencies require conforming loans to be below $417,000, unless they are for homes in high-cost areas like New York or Los Angeles,where the limit is $625,500.

Jumbo loans exceed those dollar limits and, historically, banks charge higher rates on them — about 0.25 percentage points more — than they do for conforming loans, according to the Mortgage Bankers Association. But over the past couple of months, the tables have turned.

This week, Wells Fargo (WFC, Fortune 500) advertised a 30-year jumbo mortgage at a rate of 4.125%, significantly lower than the 4.5% rate it is offering for a 30-year, fixed-rate conforming loan. US Bank (USB, Fortune 500) is offering a jumbo for 3.875% this week compared with 4.25% for a conforming loan. And Chase’s (JPM, Fortune 500) jumbos have been running a quarter of a percentage point below conventional mortgages, as have TD Bank’s (TD).

“Never in my memory have jumbos been such a bargain,” said Peter Grabel, a loan officer at Luxury Mortgage Corp. in Stamford, Ct., with 13 years on the job.

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Does your bank worry about your energy rights?

Fracking Boom Gives Banks Mortgage Headaches

Andy Peters | American Bankers | November 12, 2013 | link

An East Coast oil boom has promised potential riches to lucky landowners. But the oil rush may cause big headaches for some unlucky banks.

At least three institutions — Tompkins Financial (TMP) in Ithaca, N.Y., Spain’s Santander Bank and State Employees’ Credit Union in Raleigh, N.C. — are refusing to make mortgages on land where oil or gas rights have been sold to an energy company.

Due to technological advances in hydraulic fracturing, or fracking, huge swaths of territory are potential sites for oil and natural gas, ranging from New York state and Pennsylvania to West Virginia and North Carolina.

But much of this land is occupied by single-family homes and farms. If oil or gas is beneath his property, a homeowner could sell the rights to an energy firm, potentially reaping millions of dollars. That transaction could also derail a mortgage.

The uniform New York state mortgage agreement, used by Fannie Mae and Freddie Mac, states that “you cannot cause or permit any hazardous materials to be on your property and it specifically references oil and gas,” says Greg May, vice president of residential mortgage lending at Tompkins. “That alone would make it a problem.”

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Good news for buyers! More money coming your way…

Home loans become a little easier to get

Julie Schmit | USA TODAY |  October 23, 2013 | link

Mortgage lenders are starting to accept lower credit scores and smaller down payments.

More people are getting home loans with lower credit scores and smaller down payments.

Last month, the average FICO score for a closed home loan was 732, down from 750 a year ago, shows data from mortgage tracker Ellie Mae.

The average down payment was 19%, vs. 22% a year ago. What’s more, almost one-third of closed loans had FICO scores under 700, vs. 17% a year ago. The top FICO score is 850.

“We continue to see things open up ever so slightly month by month,” says Jonathan Corr, Ellie Mae president.

The standards to get a home loan remain tight, mortgage experts say. But lenders are reducing some restrictions as housing prices recover and as higher interest rates curtail their refinance business.

“We’re starting to see some of the banks … get more creative … to drive more volume to the door,” says Jeff Taylor, managing partner at mortgage analytics firm Digital Risk.

Earlier this month, Bank of America dropped its minimum down payment requirement for non-conforming loans under $1 million to 15% from 20%. Non-conforming loans, which cannot be sold to Fannie Mae or Freddie Mac, are over $417,000 in most parts of the country.

Wells Fargo also reduced non-conforming loan minimum down payments to 15% from 20% in July.

JPMorgan Chase, meanwhile, reduced down payment requirements in Arizona, Florida, Nevada and Michigan — states that were especially hard hit by foreclosures.

The bank’s minimum down payment is now 5%, down from 10%, for primary homes and 10%, instead of 20% for second homes in those states. The change brings down payment requirements in those states in line with others, says JPMorgan spokeswoman Amy Bonitatibus.

“These markets have shown strong signs of improvement,” Bonitatibus says. Improving home values lessen risk for lenders.

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Too good to be true? 5% down on a home…

Banks offering mortgages with only 5% down payments

Les Christie | CNNMoney | November 5, 2013 | link

Good news for homebuyers who don’t have a lot of cash on hand: Banks are offering loans with down payments of just 5%.

After the housing bubble burst, buyers needed to come to the table with as much as 20% down or they had to turn to the Federal Housing Administration for a low down-payment loan.

But now banks like TD Bank, Bank of America (BAC, Fortune 500), and Wells Fargo (WFC, Fortune 500) are loosening the purse strings, offering loans with down payments that are as low as 5%.

TD Bank’s “Right Step” mortgage, for example, allows borrowers to secure a loan with a 5% down payment. It also allows them to receive as much as 2% of the sale price as a gift from a relative or other third party, so they would really only need 3% down.

Why the change of heart? Market opportunity for one thing.

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Some kind words from our clients…

We were very grateful to have Liz Venema, DeAnna Armario, and Kim Hunt as our agents from Keller Williams in the purchasing and selling of our home.  They are a wonderful team:  caring, knowledgeable and experienced professionals with a wealth of information.  Any time we needed an answer to our questions, one or all of them were ready at hand to help us.  You can count on them to help in every step of the way from giving sound advice to staging of our home.  They helped us to minimize our furniture to highlight space, added decor to freshen up our house, and showcased our house with professional pictures and clever marketing.

All in all, Liz and DeAnna took the time to get to know our needs and delivered what we wanted.  At the end, you don’t simply gain a house of your dreams, but two new friends. We would highly recommend Liz and DeAnna as Your Agents.

Janet and Tibor Szikszai

Spendy properties supporting the recovery.

Pricier Properties Lead the Recovery

Steve Cook | Real Estate Economy Watch |  Mon, October 28, 2013 | link

More than 11% of homes sold over the past 12 months had a sales price over $500,000, sales growth was highest among homes in above-median-priced categories not entry level starter homes according to a new analysis by an economist at the National Association of Realtors.

 

In spite of the price variation by region, when summed to the regional level the median sales price for all regions of the US except the West falls into the $100,000 to $250,000 price range. The median price is the point at which the middle-priced home sold. By definition, half of homes in an area sold at a higher price and half of homes sold at a lower price than the median, according to Danielle Hale, a research economist at NAR.

Roughly a fifth of homes sold for less than $100,000 a year ago and that share shrank in September 2013 to 17.4 percent. One year ago, homes sold at $500,000 or more were roughly 10 percent of the market; they now comprise more than 11 percent of recently sold homes, Hale wrote in a post on NAR’s site.

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Facts about first-time buyers…

First-Time Buyers: What Research Tells Us

Realtor.com | link

In 2009, first-time buyers comprised an unprecedented 47 percent of the market, most likely due to the federal tax credit and historic affordability, according to the National Association of Realtors®’ 2009 Profile of Home Buyers and Sellers. And housing economists predict that 2010 will be an even bigger year for first-timers.

Who are these people, and what do they want?

– Most are married. Forty-nine percent are a married couple. Single females comprise a quarter of first-time buyers, and single males account for just 12 percent.

– They’re young. More than half—53 percent—are between the ages of 24 and 34. And 12 percent are younger than 24.

– They’re diverse. Twenty-two percent are part of a minority group, compared with 13 percent of repeat buyers. Six percent speak a language other than English, and 12 percent were not born in the United States.

– They like the ‘burbs. Even though 22 percent purchase in an urban area, the suburbs continue to be the most popular locale, with 52 percent buying there. The third most popular spot is a small town.

– They take their time. First-time buyers take an average of 12 weeks to find their home, compared with 10 weeks for repeat buyers.

– They’re not afraid of foreclosures. Eleven percent of first-timers bought a home in foreclosure, and 56 percent considered it. Only 9 percent of repeat buyers bought a foreclosure, and just 41 percent considered it.

– They’re most likely to use a referral. Fifty-three percent found their agent through a referral, compared with 36 percent of repeat buyers, many of whom sought the services of their previous agent.

How Men, Women Differ on Home Buying

Daily Real Estate News | Tuesday, November 05, 2013 | link

Men are from Mars, women are from Venus — and that couldn’t be more true when it comes to home buying. According to Prudential Real Estate’s third-quarter Consumer Outlook Survey, men and women are quite different when it comes to what they value most about home ownership and the process of buying and selling.

Women enjoy the home search more than men, with 87 percent of women versus 77 percent of men saying they like looking at homes, the survey finds. More women associate home ownership with “pride,” “accomplishment,” or “independence,” while men tend to associate it with “control over living space” and “more space for my family.”

“As the real estate market strengthens and household formation grows, men and women approach the buying-selling process from different angles,” says Earl Lee, president of Prudential Real Estate. “What’s most interesting is the dynamic that exists among couples and the role that agents play in balancing couples’ real estate objectives.”

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Home buyers demand energy efficiency…

What Home Buyers Want Most in Their New Homes

Melissa Dittmann Tracey | REALTOR(R) Magazine | March 25, 2013  | link

During the housing boom days, media rooms, wine cellars, and large expansive bonus rooms were all the rage. But ask today’s home shopper what they want most from their home and their wish-lists have gotten much more practical.

Today, it’s all about energy efficiency.

In fact, four of the top most desired home features center around saving energy, according to a new study released by the National Association of Home Builders, “What Home Buyers Really Want.”

With rising utility costs, more home buyers are thinking not just about the price of buying a home — but also how are they going to maintain it and keep it affordable once they move in?

Ninety-four percent of home buyers say they want energy-rated appliances; 91 percent want an energy-star rating for the entire home, 89 percent say they want energy-star related windows, and 88 percent want ceiling fans, according to the NAHB study.

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