More Reasons For Salt Lake Home Buyers To Use FHA
December 14th, 2007 Categories: FHA
Banging On My FHA Drum Again
There have been a couple of changes recently in the lending arena, Fannie Mae and Freddie Mac have added a new risk assessment fee and they are adding “delivery fees”
First let’s look at the risk assessment fee for those buying with a higher than a 70% loan to value ratio.
Credit scores will determine the amount of the rate adjustment.
- Credit scores between 660-679: 0.750% of loan size in fees
- Credit scores between 640-659: 1.250% of loan size in fees
- Credit scores between 620-639: 1.750% of loan size in fees
- Credit scores below 620: 2.000% of loan size in fees
This can have an impact on home prices, because when qualifying for a loan, the borrower is based on a monthly debt to income ratio. The same amount of monthly income is now able to borrow less money.
I like this solution so far, it doesn’t affect people that have good credit or a large downpayment. Let’s face it, if you have a less than favorable credit history and no down payment, you are a higher risk.
Now let’s look at the other fee.
Fannie Mae
Fannie Mae’s new fee is called an “Adverse Market Delivery Charge”
Freddie Mac
Freddie Mac’s new fee is called “New Market Condition Postsettlement Delivery Fee”
They both are charging an additional .25% fee at closing. Although it is not a huge cost, this one appears to be across the board. The other fees are based on credit score which is the best way to determine the risk. This one is a little unfair, because it lumps everyone together.
FHA Loan and Limits In Salt Lake
Now with all that said, they DO NOT apply to FHA or VA Loans that are insured or guaranteed by the Federal Government. Although FHA an VA have always had a upfront fee FHA Does Not Use FICO Score, VA has it’s own set of rules that are pretty similar to FHA.
Hmmm, I wonder which loan program is going to be become very popular in the next couple of years. So I am going to bang on my FHA Drum again. I know FHA only goes up to $362,790 in loan amount. That is approximately 83% of all the homes sold in Salt Lake County this year.
8 Reasons To Use An FHA Approved Lender
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Seller’s Property Condition Disclosure
December 8th, 2007 Categories: Real Estate News
Seller’s Property Condition Disclosure
One of the documents used in selling a home is the Seller’s Property Condition Disclosure.
Seller is obligated under law to disclose to buyers defects in the property known to seller that materially and adversely affect the value of the property that cannot be discovered by a reasonable inspection by an ordinary prudent buyer. This disclosure form is designed to assist seller in complying with these disclosure requirements. Please thoroughly disclose your actual knowledge regarding the condition of the property.
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Mortgage Rates In Salt Lake City
November 16th, 2007 Categories: Mortgage
The new “FHASecure Progam” may be coming out soon according to my Wells Fargo Bank Lender Reps reports that I have been receiving this week.
This will be a benefit to those who have adjustable ARM mortgages that are not currently an FHA loan and the interest rate has adjusted. If your interest rate has adjusted and you were delinquent on your loan due the adjustment, you may qualify for this special refinance program.
More information to come as it is officially released.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
The rates quoted are based on a purchase price of $200,000 on a 30-day lock. On these conforming loans, there are no prepayment penalties involved.
|
Program |
Rate |
APR |
| 95% | 6.125 | 7.304 |
| 100% With Mort Insurance | 6.25 | 7.656 |
| 100% No Mort Insurance | 6.625 | 6.810 |
| My Community 100% | 6.625 | 7.559 |
| VA 100% | 6.0 | 6.816 |
| FHA 97% | 6.0 | 6.176 |
If you would like any additional scenarios done, please call for that information at 801-747-1233 and ask for Cindee or email to Cindee@CindeeStone.com
The above figures are deemed reliable but not guaranteed. This advertisement is being provided for informational purposed only and is not to be construed as a loan commitment of any kind. Actual loan qualifying is subject to verification and approval of income, credit, property, appraisal and other factors. Rates, fees, and programs are subject to change at any time without prior notice. A detailed good faith estimate will be prepared upon your application for a loan.
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Have Salt Lake Home Prices Gone Too Far
November 13th, 2007 Categories: Real Estate News
Well it depends, that answer seems to be the normal answer. The median price in Salt Lake County is $230,000. The national median price for existing homes is $211,700. Below is a chart of price ranges for Salt Lake County that have been reported so far this year.
List Price Range |
Units |
Average Days On Market |
||
$140,000 |
- |
$159,999 |
1,023 |
26 |
$160,000 |
- |
$179,999 |
1,401 |
31 |
$180,000 |
- |
$199,999 |
1,545 |
31 |
$200,000 |
- |
$249,999 |
3,096 |
34 |
$250,000 |
- |
$299,999 |
2,213 |
41 |
$300,000 |
- |
$349,999 |
1,426 |
42 |
10,704 |
34 |
|||
The total volume reported so far this year for all Salt Lake county is 15,116 with an average of 37 Days on Market. The above chart represents two thirds of the market.
There were another 2,552 units sold with an average of 48 days on marketin the price rangeof $350,000-799,999
Other Counties Median Price
Davis $219,900
Utah $219,900
Tooele $184,900
Weber $154,00
Below is a list I quotes I found on a Blog in Seattle.
“The price of houses seems to have reached a plateau, and there is reasonable expectancy that prices will decline.” (Time Magazine, December 1, 1947)
“Houses cost too much for the mass market. Today’s average price is around $8000, out of reach for two-thirds of all buyers.” (Science Digest, April 1948)
“If you bought your house since the war, you have made your deal at the top of the market. The days when you couldn’t lose on a home purchase are no longer with us.” (House Beautiful, November 1948)
“The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs $28,000.” (Business Week, September 4, 1969) ”
“Be suspicious of the ‘common wisdom’ that tells you to buy now because continuing inflation will force home prices and rents higher and higher.” (NEA Journal, December, 1970)
“The median price of a home today is approaching $50,000. Housing experts predict that in the future price rises won’t be that great.” (National Business, June 1977)
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Salt Lake Real Estate Market’s Dirty Laundry
November 10th, 2007 Categories: Real Estate News
Is the Salt Lake Real Estate Market Good Or Bad? The answer is Yes.
I figured since people insist on getting their Real Estate News from TV Reporters I figure I might as well stop fighting it and give it to them that way. So this morning my daughter and I had fun making me a TV Reporter.
Well there certainly is no shortage of depressing news about the Real Estate Market, even the real estate agents will tell you that the market is bad. The problem I find with TV and newspapers is they are not always about the truth or should I say the whole truth and nothing but the truth. They are more concerned with readers and viewers, so they can charge more for their advertising.
When the national media reports how bad the Real Estate Market is, they are selling advertising and people don’t watch the news when the market is good. I find it amazing that people even consider national news networks as a source for local financial information.
On the other hand, things like trust, truth are all I can offer. I do not sell advertising on my space, I do report and write for business, and I believe that if I give away my knowledge to people I will be an asset and people may consider me when it is time to buy or sell or invest.
Let’s get a little clarity on things. First and foremost Real Estate Is Local In Nature, what is happening in Florida, Michigan has nothing to do with the Utah market. Markets can be different between counties and neighborhoods, between price ranges in the same zip code. Now there are some ties like interest rates and such, but my goodness rates are below 6.5% so we know that is out.
Now for real estate agents about two thirds of the agents in Utah got their license in the last five years, so most do not know what is going on. People and agents alike compare everything to last couple of years, where prices were going up 1,2 and 3 percent per month, people with bad credit and they did not have to verify their income were getting large loans, that is not normal.
So the big question is, how is the Salt Lake Market? The answer is depends. The overall residential market is fairly healthy and normal. There are some factors that are waiting to be played out. For example how much of the current inventory is from speculators and the over building in the South West part of the county.
September’s volume was down 20% over the month of August, but it usually is. The same time frame last year when the market was abnormal the volume difference was 12%.
Remember September’s closings are August contracts. There is a natural seasonal slowdown in August because families have already made their purchase.
So what’s hot and what’s not.
Hot-Sandy $300,000 and under, three bedrooms together in the main bedroom area (not 2 on the main and 3 in the basement). Age of kitchen and bath is more important than the age of the home. If they are updated clean and well maintained, then they will sell fairly quickly and usually can draw multiple offers.
Not-The boat load of the speculator properties, where they bought an older not updated home and slapped a coat of paint along with a medium grade carpet and call it updated. There are plenty of those out there and some bargains can be found that make great rental properties.
Hot- New Ramblers with a small yard, main floor laundry 2 car garage. The empty nesters have nice family homes and now want to have a house that suits their lifestyle. They are not necessarily downsizing, they really don’t want smaller houses, they want smaller yards and less rooms.
Super Hot- Condos with a 2 car garage main floor one level living. The updating applies also. The other factor in a condo is the amenities. They come at a premium. There are a lot of mature single people, that are a single income and do not want to pay for the amenities, face it fifty percent of marriages end in divorce.
Super Not- New Construction in the Southwest section of Salt Lake County except for starter price ranges if you can find them. Also Super not are Starter Mansions in Draper, there are over 200 active listings in Draper above $600,000.
Here are some lyrics from a Don Henley song Dirty Laundry that explain how I feel about TV reporters giving real estate news.
We got the bubble-headed-bleach-blonde who
Comes on at five
She can tell you bout the plane crash with a gleam
In her eye
Its interesting when people die-
Give us dirty laundry
We can do the innuendo
We can dance and sing
When it’s said and done we haven’t told you a thing
We all know that crap is king
Give us dirty laundry!
| Discussion: 1 Comment »
Mortgage Rates In Salt Lake City
November 9th, 2007 Categories: Mortgage
The Federal government lowered Prime interest rates to 4.5%. This is an interest rate that is directly related with 2nd mortgages, car loans, credit cards etc.
There is talk of another decrease next month that will lower prime to 4.25%. A lot of people do get confused and think that is the rates for 1st mortgages. So, don’t get confused.
It is still a great time to do buy or refinance your loans now. Do not be afraid of what you are hearing in the media. There are loans up to 100% available and grants to help with down payment and or closing costs.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
The rates quoted are based on a purchase price of $200,000 on a 30-day lock. On these conforming loans, there are no prepayment penalties involved.
|
Program |
Rate |
APR |
| 95% | 6.25 | 7.08 |
| 100% With Mort Insurance | 6.5 | 7.88 |
| 100% No Mort Insurance | 6.875 | 7.06 |
| My Community 100% | 6.875 | 7.63 |
| VA 100% | 6.125 | 6.3 |
| FHA 97% | 6.125 | 6.94 |
If you would like any additional scenarios done, please call for that information at 801-747-1233 and ask for Cindee or email to Cindee@CindeeStone.com
The above figures are deemed reliable but not guaranteed. This advertisement is being provided for informational purposed only and is not to be construed as a loan commitment of any kind. Actual loan qualifying is subject to verification and approval of income, credit, property, appraisal and other factors. Rates, fees, and programs are subject to change at any time without prior notice. A detailed good faith estimate will be prepared upon your application for a loan.
| Discussion: 3 Comments »
Why Is There A Lot Of Remodeling Going On In Cottonwood Heights?
November 5th, 2007 Categories: Cottonwood Heights
Why There Is A Lot Of Remodeling Going On In Cottonwood Heights (84121)*?
The prices have gone up so much in the last three – four years that selling and replacing the house is not much of an option.The average Sq Ft price in September 2004 was $94 and has gone to $151 per foot.
People are adding on to their houses, I have seen one that has doubled in size. More and more are adding over the garage in the multi levels. People are replacing windows, stuccoing, new kitchens, and new bathrooms. If you bought a small home in the early to mid ’90s, tearing it down would be a very viable option.Let’s face it, if you took the $57 per foot and added on to your existing Cottonwood Heights Home you could not go out and find a better deal. This a great place to live, named in the top 100 Cities by Money Magazine.*Because Cottonwood Heights as a City only goes back less than three years, we have to use the zip code which also includes Big Cottonwood Canyon. The Canyon activity is not enough to sway the prices for The City of Cottonwood Heights.
| Discussion: 7 Comments »
Rates In Salt Lake City
October 26th, 2007 Categories: Mortgage
Rates have had some improvements over the last week. It is a great time to do buy or refinance your loans now.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
|
Program |
Rate |
APR |
| 95% | 6.13 | 6.26 |
| 100% With Mort Insurance | 6.25 | 7.61 |
| 100% No Mort Insurance | 6.75 | 6.89 |
| My Community 100% | 6.75 | 7.52 |
| VA 100% | 6.25 | 6.39 |
| FHA 97% | 6.13 | 6.90 |
The rates quoted are based on a purchase price of $400,000 on a 15-day lock. On these conforming loans, there are no prepayment penalties involved. The above figures are deemed reliable but not guaranteed. This advertisement is being provided for informational purposed only and is not to be construed as a loan commitment of any kind. Actual loan qualifying is subject to verification and approval of income, credit, property, appraisal and other factors. Rates, fees, and programs are subject to change at any time without prior notice. A detailed good faith estimate will be prepared upon your application for a loan.
| Discussion: 1 Comment »
When Buying A Home, Should I Get A Home Warranty?
October 20th, 2007 Categories: Buying
Home Warranty 101
A Home Warranty is an insurance policy against mechanical defects of the home. If a mechanical item breaks down the home owner then calls the Home Warranty Company. The company then sends out a technician to look at the defects. The home owner will pay a $55 deductible and the technician will invoice the Home Warranty Company for all of the covered costs over and above that amount.
The basic cost of a Home Warranty policy can start at about $255 for condos and $275 for single family homes. The basic plan for a home warranty policy will include items such as heating, plumbing, dishwasher, garbage disposal, garage door opener, water heater, plumbing stoppages, attic and exhaust fans, duct-work, electrical system, oven/cook-top/range, trash compactor, built-in microwaves, instant hot water dispensers, circulating pumps, toilets, sump pumps, and jetted tubs. A home owner can pay extra for coverage on refrigerators, washer/dryer, air conditioning, and swimming pools/hot tubs.
If you are buying a home I recommend asking the seller to give a home warranty, if they are not willing to purchase one for you. I recommend you purchase one for yourself.
They are so common that it is a fill in the blanks of the Salt Lake Board Of Realtors Purchase Contract, section 10.3
| Discussion: 6 Comments »
Property Appraisal
October 13th, 2007 Categories: Buying
The Bank Qualifying The Property
As I mentioned in Things You Need To Know When Buying A Home the Bank qualifies the borrower AND the property. Let’s talk about qualifying the property, for the most part it means an appraisal. When you are borrowing money the bank will require it. If paying cash it is not necessary and sometimes a good set of comparable sales can satisfy the need for an appraisal. How an appraiser does an appraisal.
There are three approaches to appraising a property.
1. The cost depreciation approach.
First the appraiser will establish the value of the land and then what it would cost to build the home today and then minus for depreciation of the building.
2. The income approach.
Take the income of the property minus out expenses and determine a net income and then divide it by the average capitalization rate of the area (look for a post on CAP Rate in the future)
3. The comparable sales approach.
This is the most common used in residential real estate sales. An appraiser will take the recent sales in the area that closest match the subject property and make adjustments to the comps to determine an estimate of value. They are really not trying to establish an exact value such as $218,953.28. They are really trying to determine if the property will work as collateral for the loan.
They also do a basic inspection (NOT to be used instead of a professional home inspection). They will indicate the overall appearance and note if there are utilities and the property appears to be in a normal condition for the area. An appraiser can require that certain items be certified by a licensed professional such as a roof if the roof looks suspect or evidence of electrical malfunctions, then they can ask for an electrical certification.The next thing that the bank looks for in a property is the title work. They want to know if there are any deed restrictions that could affect the value. In residential there are not too many things that will have a real affect.
A good example of a deed restriction. The old Villa Theater on Highland Drive. Well it was bought by Harmon’s grocery store and they put a restriction that if anyone were to buy the land they could not build a grocery store to protect their interest of their store a couple blocks away.So once the borrower and the property finish being qualified then the loan can close and you get the property.
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