Points are upfront fees paid by the borrower to obtain a better interest rate on a loan. One point equals one percent of the loan amount. While a lower interest rate may result in a lower monthly payment, it is important to consider how long you intend have the loan and to compare current interest rates to historical trends. This will help you determine whether paying points is a worthwhile investment.
It’s also important to remember that interest rates run in cycles. When rates are at historical lows, it makes more sense to pay points if you plan to live in the home for an extended period of time. If it’s unlikely rates will go down in the near future, then there will be no need to refinance. When interest rates are high, however, there is a strong likelihood they will come down again before too long. Therefore, this is not a good time to pay points. The chances of refinancing in the near future are extremely high, and you will likely not be in the loan long enough to recoup the upfront cost of the points.
Tax deductibility is another thing to consider when choosing whether or not to pay points. For new purchases, interest from both points paid and your mortgage are tax deductible up front. For refinances, however, points are not deductible up front. Instead the deductions are spread out over the term of the loan (unless the entire loan is paid off early), making points more costly in comparison.
Ultimately, there is much to bear in mind when considering points. At LoanCentral we will work with you to determine the best course of action based upon your specific situation and needs.
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Monday, April 27, 2009
Wednesday, April 22, 2009
Snohomish County Statistics - March, 2009
Current Residential & Condo listings - 5,739 (down 15.62% from last year)
New listings taken this month - 1,549
Pending sales this month - 865 (down 5.05% from last year)
Percent of listings that sold this month - 15.07%
Median closed sales price - Mar. ‘08, $335,000
Median closed sales price - Mar. ‘09, $304,950
Rate of appreciation = -8.97%
~ Courtesy of NWMLS
New listings taken this month - 1,549
Pending sales this month - 865 (down 5.05% from last year)
Percent of listings that sold this month - 15.07%
Median closed sales price - Mar. ‘08, $335,000
Median closed sales price - Mar. ‘09, $304,950
Rate of appreciation = -8.97%
~ Courtesy of NWMLS
King County Statistics - March, 2009
Current Residential & Condo listings - 13,069 (down 8.35% from last year)
New listings taken this month - 4,017
Pending sales this month - 2,058 (down 11.06% from last year)
Percent of listings that sold this month - 15.75%
Median closed sales price - Mar. ‘08, $405,000
Median closed sales price - Mar. ‘09, $335,000
Rate of appreciation = -17.28%
~ Courtesy of NWMLS
New listings taken this month - 4,017
Pending sales this month - 2,058 (down 11.06% from last year)
Percent of listings that sold this month - 15.75%
Median closed sales price - Mar. ‘08, $405,000
Median closed sales price - Mar. ‘09, $335,000
Rate of appreciation = -17.28%
~ Courtesy of NWMLS
Eastside Statistics - March, 2009
Current Residential & Condo listings - 4,927 (up 0.26% from last year)
New listings taken this month - 1,379
Pending sales this month - 569 (down 18.83% from last year)
Percent of listings that sold this month - 11.55%
Median closed sales price - Mar. ‘08, $525,000
Median closed sales price - Mar. ‘09, $422,500
Rate of appreciation = -19.52%
~ Courtesy of NWMLS
New listings taken this month - 1,379
Pending sales this month - 569 (down 18.83% from last year)
Percent of listings that sold this month - 11.55%
Median closed sales price - Mar. ‘08, $525,000
Median closed sales price - Mar. ‘09, $422,500
Rate of appreciation = -19.52%
~ Courtesy of NWMLS
Brokers Report Signs of Improvement in the “Real-time” Housing Market
Pending sales around Western Washington for the month of March reached the highest level in six months, according to the latest figures from Northwest Multiple Listing Service (NWMLS).
Compared to February, last month’s pending sales (offers made and accepted, but not yet closed) surged 25%. Last month’s volume was down 5.6% when compared to twelve months ago, but it was the highest monthly total since September.
NWMLS director Dick Beeson believes continued reduction in inventory will spur buyer activity. “Well priced and well conditioned properties will generally be the first ones purchased,” Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, predicts.
Prices for last month’s completed sales fell about 14% area-wide from a year ago, reflecting a combination of factors, including a lingering imbalance between supply (inventory) and demand (buyers), creating a favorable market for buyers. Also, although not quantified in the NWMLS report, a sizable number of foreclosed homes and short sales are included in the monthly tallies so those deeply-discounted properties tend to drag down prices overall.
“As expected, the numbers reflected in the March report continue to show year over year declines. However, these historical comparisons fail to tell the story of the real-time market, which is beginning to show true signs of improvement in many areas,” said Ron Sparks, managing vice president of Coldwell Banker Bain.
Pending sales in the MLS map areas that make up most of Seattle surged 35.4% in March compared to February. The southwest part of King County also registered robust month-to-month gains - 39.3% - while sales on the Eastside rose more than 32% last month compared to February.
J. Lennox Scott, Chairman and CEO of John L. Scott Real Estate, believes more can be done at the national level to stimulate the housing market. In testimony before a U.S. Senate committee last week, he urged support for a number of measures proposed by the National Association of Realtors®. The proposals include allowing a home buyer to use tax credit funds toward a down payment and encouraging FHA to use its authority to increase loan limits in communities that have exceptionally high home prices.
Encouraged by some of the positive indicators in the latest MLS report, Sparks acknowledged “we’re not out of the woods quite yet, but market improvement must begin somewhere.” NWMLS director Dick Beeson agreed. “All in all, we are seeing generally increased interest at all levels of the market, high and low end. We may not soon see 2005 or 2006 levels of sales numbers, but we're holding our own and progressing steadily in the right direction.”
~ Courtesy of NWMLS
Compared to February, last month’s pending sales (offers made and accepted, but not yet closed) surged 25%. Last month’s volume was down 5.6% when compared to twelve months ago, but it was the highest monthly total since September.
NWMLS director Dick Beeson believes continued reduction in inventory will spur buyer activity. “Well priced and well conditioned properties will generally be the first ones purchased,” Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, predicts.
Prices for last month’s completed sales fell about 14% area-wide from a year ago, reflecting a combination of factors, including a lingering imbalance between supply (inventory) and demand (buyers), creating a favorable market for buyers. Also, although not quantified in the NWMLS report, a sizable number of foreclosed homes and short sales are included in the monthly tallies so those deeply-discounted properties tend to drag down prices overall.
“As expected, the numbers reflected in the March report continue to show year over year declines. However, these historical comparisons fail to tell the story of the real-time market, which is beginning to show true signs of improvement in many areas,” said Ron Sparks, managing vice president of Coldwell Banker Bain.
Pending sales in the MLS map areas that make up most of Seattle surged 35.4% in March compared to February. The southwest part of King County also registered robust month-to-month gains - 39.3% - while sales on the Eastside rose more than 32% last month compared to February.
J. Lennox Scott, Chairman and CEO of John L. Scott Real Estate, believes more can be done at the national level to stimulate the housing market. In testimony before a U.S. Senate committee last week, he urged support for a number of measures proposed by the National Association of Realtors®. The proposals include allowing a home buyer to use tax credit funds toward a down payment and encouraging FHA to use its authority to increase loan limits in communities that have exceptionally high home prices.
Encouraged by some of the positive indicators in the latest MLS report, Sparks acknowledged “we’re not out of the woods quite yet, but market improvement must begin somewhere.” NWMLS director Dick Beeson agreed. “All in all, we are seeing generally increased interest at all levels of the market, high and low end. We may not soon see 2005 or 2006 levels of sales numbers, but we're holding our own and progressing steadily in the right direction.”
~ Courtesy of NWMLS
Jumbo Financing is Returning!
When the credit crisis hit in late 2007, jumbo financing all but disappeared overnight. Unlike conventional loans, jumbo loans are not purchased by Fannie Mae or Freddie Mac…rather private investors on the secondary market purchase these loans. With private investors spooked by the fallout of the subprime loans, there was no longer a market for jumbo loans. Without a market to sell to, lenders had to either decide to hold jumbo loans in their portfolio, or stop funding them altogether.
Most lenders took the conservative route and stopped funding jumbo loans. Nearly 18 months later, we are slowly starting to see jumbo loans emerge back into the market. Just this week, we have seen expanded programs for jumbo loans introduced. For those looking for low down payment options, FHA loans are available with a 3.5% down payment up to loan amounts of $567,500. As of this week, the new ‘conventional jumbo’ limit is being increased to $567,500 with a 10% down payment. Above these limits, we now have fixed rate programs available with a down payment of 30% up to loan amounts of $1,000,000, with 30 year fixed rates in the range of 5.25% - 5.625%. Jumbo 5 year ARM’s are available with a 30% down payment with rates in the range of 4.5% -5.0%. This provides great financing options for those looking to purchase or refinance in the upper price ranges and home values.
Call today to learn more about these tremendous opportunities!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@loancentral.com
Most lenders took the conservative route and stopped funding jumbo loans. Nearly 18 months later, we are slowly starting to see jumbo loans emerge back into the market. Just this week, we have seen expanded programs for jumbo loans introduced. For those looking for low down payment options, FHA loans are available with a 3.5% down payment up to loan amounts of $567,500. As of this week, the new ‘conventional jumbo’ limit is being increased to $567,500 with a 10% down payment. Above these limits, we now have fixed rate programs available with a down payment of 30% up to loan amounts of $1,000,000, with 30 year fixed rates in the range of 5.25% - 5.625%. Jumbo 5 year ARM’s are available with a 30% down payment with rates in the range of 4.5% -5.0%. This provides great financing options for those looking to purchase or refinance in the upper price ranges and home values.
Call today to learn more about these tremendous opportunities!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@loancentral.com
Making Home Affordable Refinance Program
The Making Home Affordable program was announced by President Obama and the U.S. Department of the Treasury last month and has finally hit lender rate sheets. This new initiative is designed to provide refinance opportunities to borrowers with mortgages held or guaranteed by Fannie Mae. The program, called DU Refi Plus, is for borrowers who have demonstrated an acceptable payment history on their mortgage but due to a decline in home prices, have been unable to refinance to obtain a lower payment or move to a more stable product.
Program Highlights:
• Borrower must have a current Fannie Mae mortgage
• New loan cannot include the pay off of an existing
second mortgage or other debts; if there is a second
mortgage it must be subordinated by the current lender
• Closing costs and prepaid items can be rolled into the
new loan amount
• Cash back to the borrower cannot exceed $2,000
• New second mortgage financing not allowed
• No appraisal needed in some cases
• Reduced income documentation in some cases
• If there is no mortgage insurance on the current loan,
then no mortgage insurance is required on the new
loan if the new loan to value ratio is not greater than
105%
• No minimum credit score required
• No 60-day late mortgage payments allowed in the past 12
months
• Primary residence, second home, or investment
properties allowed; this includes 1-4 unit family homes,
condominiums and PUDs
~ Courtesy of Wendy Charles, LoanCentral LLC,
425.468.9321, WendyC@loancentral.com
Program Highlights:
• Borrower must have a current Fannie Mae mortgage
• New loan cannot include the pay off of an existing
second mortgage or other debts; if there is a second
mortgage it must be subordinated by the current lender
• Closing costs and prepaid items can be rolled into the
new loan amount
• Cash back to the borrower cannot exceed $2,000
• New second mortgage financing not allowed
• No appraisal needed in some cases
• Reduced income documentation in some cases
• If there is no mortgage insurance on the current loan,
then no mortgage insurance is required on the new
loan if the new loan to value ratio is not greater than
105%
• No minimum credit score required
• No 60-day late mortgage payments allowed in the past 12
months
• Primary residence, second home, or investment
properties allowed; this includes 1-4 unit family homes,
condominiums and PUDs
~ Courtesy of Wendy Charles, LoanCentral LLC,
425.468.9321, WendyC@loancentral.com
Seattle-area prices to bottom out at the end of this year?
Moody's Economy.com expects Seattle-area prices to bottom out at the end of this year with a total decline of 19% from the Summer 2007 peak in King and Snohomish counties.
Prices fell 11% from the peak through the end of 2008, according to Moody's. They use a Case-Shiller index that looks at repeat sales of the same houses, similarly to the Standard & Poor's/Case-Shiller Home Price Indices, which reported that area prices already had fallen 19.7% from the peak. The difference is that the latter index also includes Pierce county, which has seen larger price drops that King and Snohomish, and was for the month of January, rather than the previous quarter.
Seattle's projected drop is significantly less than the 37% total decline Moody's expects nationally.
That's because prices rose relatively modestly during the boom and Seattle's economy was stronger to begin with, said Gus Faucher, director of macroeconomics at Economy.com. "It did better during the expansion, so it was in pretty good shape heading into the recession, and that will help."
Prices fell 11% from the peak through the end of 2008, according to Moody's. They use a Case-Shiller index that looks at repeat sales of the same houses, similarly to the Standard & Poor's/Case-Shiller Home Price Indices, which reported that area prices already had fallen 19.7% from the peak. The difference is that the latter index also includes Pierce county, which has seen larger price drops that King and Snohomish, and was for the month of January, rather than the previous quarter.
Seattle's projected drop is significantly less than the 37% total decline Moody's expects nationally.
That's because prices rose relatively modestly during the boom and Seattle's economy was stronger to begin with, said Gus Faucher, director of macroeconomics at Economy.com. "It did better during the expansion, so it was in pretty good shape heading into the recession, and that will help."
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