Real Estate Market News November

Now is the time to buy! You can save thousands!

Not only can you get a great deal on buying a home. You can also take advantage of low rates and save thousands of dollars over 30 years! If you have been thinking of moving up, now is the time to make the move. Below I have listed out the differences in 30 mortgage payments at a 6% loan versus a 4.25% loan.



If you would like a free no obligation market analysis on your existing home please feel free to contact me I would be happy to help you. Never has there been a better time to move up! If you don't currently own contact me for a free no obligation buyer consultation. There are great deals out there!

Changes to FHA

FHA will issue a mortgage letter with some significant changes to FHA loans.

Some of the changes:
Up Front Mortgage Insurance Premium raised from 1.75% to 2.25%
Seller Concessions Reduced from 6% to 3%
New Provisions for borrowers with lower credit scores. Some FHA lenders would allow a 580 Credit Score or below. Now if the credit score is below 580, 10% must be the down payment.

For more information click here to be taken to the US Department of Housing and Urban Developments page.

New Mortgage Regulation

The Housing and Economic Recovery
Act of 2009 (HERA) is a wide-ranging
piece of legislation that strengthens and
modernizes the regulation of government-
sponsored enterprises Fannie Mae
and Freddie Mac, along with the Federal
Home Loan Banks.

Part of HERA imposes sweeping changes
in the lending industry, placing greater
focus on consumer protection. HERA
aims to assure borrowers are better
informed about the loan process and
better protected against deceptive lending
practices.

These changes, effective July 30, 2009,
will have a direct impact on how
Realtors structure their transactions
and how lenders keep the consumer
informed of loan charges through stricter
disclosure requirements.

Four Key Elements

1. If the home buyer is financing the
property, the new regulatory and
investor guidelines will impact and
perhaps even dictate the closing date.
In the past, the parties to the transaction
agreed upon a closing date and all
service providers, including the lender,
worked to meet that date. After July 30,
a closing date may still be written into
the contract, but the earliest any home
purchase transaction can close is 7 days
after the homebuyer receives the initial
mortgage disclosures from the lender.

2. With the exception of the credit
report fee, the lender cannot collect
upfront fees until the initial disclosures
have been received. Disclosures that
are overnighted are considered “received”
the next business day (except Saturdays),
allowing fees to be collected the following
business day.
Historically, lenders could collect upfront
fees immediately at the time of application
for both telephone and in-person
applications. Now, the buyer must receive
initial disclosures before any fees can
exchange hands. The single exception
is the credit report fee, which can be
collected at the time of application.
If a lender takes an application in person
and delivers the disclosures at that time,
the fee can be accepted at that time as
well.

3. The homebuyer must receive a
copy of his appraisal a minimum of
3 business days prior to closing.
A homebuyer who believes the required
3-business-day review period is not
necessary may waive that requirement in
writing.

4. Any increase of more than .125%
in the Annual Percentage Rate (APR)
from the initial Truth in Lending
Disclosure (TIL) requires that the TIL
Disclosure be revised and reissued to
the homeowner.

The homebuyer must receive the revised
TIL Disclosure at least 3 business days
before the closing. If the TIL is mailed, it
is considered “received” 3 business days
after the mailing.

It is typical for many details to change
during the course of the transaction,
including the APR, which can delay
the closing. The APR can be impacted
by many details of the market and the
transaction, including an unlocked rate,
a change in the loan amount, a change
to a different loan product, a rate relock
because of market improvement, a
change in closing date, and changes to
fees associated with the transaction. If
the closing date is critical, it is imperative
that the lender ensure that the estimated
fees are as accurate as possible.

Denver Real Estate Values Increase!

The 2.1 percent average rise in home prices in 22 out of 25 metropolitan statistical areas (MSAs) from April to May suggests that recovery could be at hand in many areas, says Radar Logic, a real estate data and analytics company.

"This is in stark contrast to the same period during 2008, when a decrease in the velocity of home price depreciation gave way to the worst loss in housing value in recent history," according to the report.

The report calculates that in the key MSAs it studies, prices have fallen 33.5 percent peak-to-trough and 31 percent peak-to-current.

Here are the 10 metropolitan areas where prices increased the most from April to May of this year:

1. Milwaukee, Wis., 4.9 percent
2. Charlotte, 4.7 percent
3. Boston, 4.6 percent
4. Cleveland, 4 percent
5. Washington, D.C., 3.7 percent
6. St. Louis, 3.3 percent
7. Columbus, Ohio, 3.2 percent
8. Seattle, 2.8 percent
9. Denver, 2.3 percent
10. Philadelphia, 1.8 percent

Source: Radar Logic (07/23/2009)

If you are currently thinking about buying and are a first time home buyer now is the time with the $8,000 tax credit scheduled to end December 1st. Contact us to see how we can help you find your dream home!

Jefferson County Colorado Realtor explains FICO

Several months ago, just about anyone breathing could get a loan to buy a home in the Jefferson County Colorado Real Estate Market. Fast forward to today and you might have to give up your first born to get that same loan. It is definitely harder to get a loan than it was, but there are things you can do to help improve your chances. If you have credit score issues, you can have your credit repaired in the next six months and still cash in on the $8,000 first time buyer credit.

First let’s identify what a FICO score is. It is an abbreviation for Fair Issac Company. It is a measure of borrowers credit risk commonly used by mortgage people when determining loan worthiness. It is typically between 300 and 850. It not only determines whether you get the loan, but often will also dictate the terms of the loan.

Last year a good credit score was between 680 and 720; fast forward to now and it really needs to be in the mid 700’s.

The score is comprised using the length of your credit history, your payment history, the types of credit you use, the amount you owe and the amount of new credit you have obtained. These things work together to determine your FICO score.

If your credit score is low; consider doing the following things:

Check your credit at www.annualreport.com ; this will allow you to check your credit for free; if you want your score there is a nominal charge of around $9.00

Fix any errors as quickly as you can by providing the needed documentation to the requesting party.

Reduce what you owe, pay on time and do not apply for credit you do not need.

March 2009 Auction for over 200 foreclosed homes in Colorado

Over 200 foreclosed homes are to be sold at this auction.

When: Saturday, March 21st
Where: Colorado Convention Center
Exhibit Hall B
700 14th Street
Denver CO 80202
Time: Registration at 8:00 a.m.
Auction at 9:30 a.m.

For additional information including a list of properties contact us.

American Recovery and Reinvestment Act

What does it mean for real estate and the economy in Denver?

This $780 billion dollar package has many elements that will impact the real estate industry market trends and forecast for 2009. Here is a breif synopsis of key real estate provisions in the bill.

Home Buyer Tax Credit - This bill provieds for an $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. The cost of the program is $3.7 billion, less than 1 percent of the overall stimulis package. The benefit will be felt widely as first time homebuyers move to take advantage of low housing prices triggering trade-up perchases. The tax credit is likely to boost home sales by 300,000 first-time buyers in 2009.

FHA, Fannie Mae and Freddie Mac loan limits - The bill reinstates the 2008 loan limits for FHA, Freddie Mac and Fannie Mae loans. These limists were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For a few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted to increase the loan limit for any "sub-area", i.e. an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009. The higher loan limit will permit more home buyers and homeowners to access lower interest loans as Fannie Mae and Freddie Mac will now be able to buy those loans. The loans for amounts above the limit are jumbo loans that carry very high interest rates. The provision will provide more people the ability to refinance at a lower rate and provide more people the ability to lock in lower interest rates for purchases. This is good news for thos in higher -end markets. The highend market has been stalled and this measure provides some relief. The high loan limit is likely to raise home sales on the high-end by 150,000 in 2009.

Neighborhoos Stabilization - The bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP provides grants through the Community Development Block Grant program CDBG to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and re-sell foreclosed and abandoned properties. In addition the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or velow 50% of area median income.

Can I still get a mortgage in today's volitale market?

Don't let today's volatile market worry people who are thinking of purchasing a home.



Qualified buyers can still get a mortgage and can still buy a new home.



Click or paste the link below to view a video.


http://www.teravisiontech.com/majesticconsulting/postcards2.0/showpostcard.php?postcard_id=3&clientid=29

Questions regarding the $7500 tax credit? Watch this link and get your answers!

Here is a great link to a wonderful presentation on the home buyer tax credit. Please feel free to watch and listen and if you have any questions don't hesitate to contact us. Now is a great time to buy.


http://www.teravisiontech.com/majesticconsulting/postcards/showpostcard.php?postcardid=27

Fannie and Freddie delay foreclosures for holiday season

Mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures for about 16,000 homes during the holiday season. They are halting foreclosures sales between November 26th and January 9th while they evaluate whether borrowers qualify for a new loan-modification program announced last week. Around 10,000 households will be affected with Fannie and 6,000 households with Freddie. This change does not apply to vacant homes. Fannie and Freddie were seized by the government on September 7th. The companies chief executives were ousted and the government now has direct control over the pair. Fannie and Freddie's loan modification plan aims to help abate the foreclosure crisis.

Information gathered from article by Alan Ziebel of The Associated Press

A little Positive News in the Denver Real Estate Market

If you are looking for a positive perspective on in this crazy real estate market we have it below. Things are looking up here in Denver!

Seven hotels retain U.S. 36 plans: A faltering economy hasn’t chased hotel developers away from the U.S. 36 corridor, where seven hotels are slated to open before energy giant ConocoPhillips launches a new training facility on the former StorageTek campus in 2012. (Denver Business Journal)

http://denver.bizjournals.com/denver/stories/2008/10/06/story1.html

Home Prices: Now for the Good News: Denver listed in the top 7 of areas most likely to rebound. Denver’s overall outlook is sunnier than for most western cities because neither inventory nor prices spiraled out of control during the boom. (Yahoo Real Estate)

http://realestate.yahoo.com/promo/home-prices-now-for-the-good-news.html;_ylc=X3oDMTF0NTRjZTFlBF9TAzI3MTYxNDkEX3MDOTc2MjA0NjUEc2VjA2ZwLXRvZGF5BHNsawNob21lLXByb2Nlcy1nb29kLW5ld3M-

ULI ranks Denver among top 10 real estate markets: The Urban Land Institute named metro Denver one of its top 10 real estate markets to watch next year, in its Emerging Trends in Real Estate 2009 report released Oct. 21. (Denver Business Journal)

http://denver.bizjournals.com/denver/stories/2008/11/03/daily8.html?surround=lfn&brthrs=1

Halting the Mortgage Meltdown: Citigroup, JPMorgan Chase and Bank of America have separately announced plans to help ailing borrowers. On Tuesday, the Federal Housing Finance Agency, the regulator for Fannie and Freddie, announced its own sweeping plan. Collectively the hope to modify 1.3 Million loans.

http://www.forbes.com/wallstreet/2008/11/11/mortgages-fannie-freddie-biz-wall-cx_lm_1111citi.html

Supply of Unsold Homes Dives Again: The number of unsold homes on the Denver-area market continued to plummet in October, falling to an almost three-year low. There were 4,504 homes placed under contract, down only 3 percent from the 4,645 in October 2007

http://www.rockymountainnews.com/news/2008/nov/07/stock-of-unsold-homes-dives-again/?partner=RSS

Reprinted with permission: Land Title's positive perspective newsletter November.

Statement by James B. Lockhart of Mortgage Rescue Policy by FHFA

Below is a link to the yesterday’s announcement of the mortgage rescue
package/plan by Federal Housing Finance Agency.

This plan encourages Fannie Mae and Freddie Mac, as well as private
mortgage holders, to modify mortgages held by borrowers who are in
financial trouble and on the verge of foreclosure. In order to be
eligible for a potential loan modification, a borrower must be at least
90 days behind in their payments, the property must be a primary
residence, and the new/modified payment must not exceed 38% of the
borrower’s monthly income.

Critics of this plan say it falls short as FNMA and FHMC don’t hold the
majority of the problematic sub prime loans in the market, but
nonetheless it is a step in the right direction to hopefully slow the
pace of foreclosures and stabilize the market.

http://www.fhfa.gov/GetFile.aspx?FileID=169


As always if you have any questions reagarding your local real estate values or buying a home please feel free to contact us anytime!

Will the election of the 44th President change our housing market?

While I think that the President elect Barack Obama will make changes to aid our economy, I don't think that he will have a huge impact on the housing market. Over time I believe some of the economic changes he makes will impact our market in a positive way, but just because we have chosen our next president will not make people go out and decide to buy a house. I think people still buy and sell for the same reasons. They need to move for work, their family is growing or they are empty nesters, some simply move just for a change. The golden rule to real estate is that over time it is one of the best investments that you can make. Over time your home will appreciate. Over time our market will recover, there is no overnight fix. If you are thinking about buying right now rates are still historically low and you will get an awesome deal on a house, and yes over time you will gain equity, just not over night like in the past. If you are an investor now is a great time to invest and over time your investments will pay off. Real estate has always been one of the best investments you can make and even in troubled times is still the best investment you can make for yourself and your family's future.

The market in Jefferson County Colorado is showing signs of improvement and I believe it will continue to. We definitely are better off than other parts of the nation. Something we should all be thankful for.

I am in the market to buy a home. Is now a good time to buy?

Now is absolutely a wonderful time to buy! The Home Purchase Tax Credit for first time buyers is one of the reasons why it’s a great time to buy NOW as opposed to waiting.
Lower prices, a huge abundance of inventory for sale, sellers that are getting more desperate by the month (at least the serious ones are)…all of this is what creates a very strong negotiating position for the buyers side of the transaction.
What do you risk by waiting?

Rising Interest Rates
If interest rates start going up by any significant amount, you are losing all the benefit of buying the home for a lower price because your interest payments will go up significantly.

Losing the Home Buyer Tax Credit
That’s a $7,000 interest-free loan from the government that you WON’T get if you wait to buy…it’s free money!

The market could turn around before you know it.
From my experience, it takes 2-3 months for real estate agents to know that the market is changing direction…it takes another 2-3 months beyond that before the average buyer/seller realizes the shift (How many people do you know who didn’t believe their Realtor when told that the market was no longer going up 2 years ago? How long did it take them to come around and realize the shift?)

We tend to give all my buyers the same basic advice.
If you are buying a home in a downward trending market, understand that you’re buying a HOME…not a cash cow. Plan on living in it. Plan on staying. There is no better long-term investment than real estate - but it’s the long term that makes it a safe bet…the only time you get into trouble is when you HAVE to sell (if the investors who got burned didn’t have to sell, they could have taken their properties off the market, waiting for it to turn around, and then sold for a great profit…but their hand was forced because they were (mostly) in over their head. Buy a HOME first…investment second, and you will be absolutely thrilled with the deals you can get in today's marketplace…just please don’t turn around and want to sell next month for a $35,000.00 dollar profit!

Busting the myth. Yes you can still get a home loan!

I was on a listing appointment this weekend. The seller started asking me about buyers and how many would even be able to qualify to get a loan right now to purchase his home. I noticed what a huge area of concern was for my client and decided that I should write a little something about it to bust the myths that the media seems to be portraying lately. Many consumers right now would like to purchase a home, but they are worried that they can’t get financing. So what’s the real story with getting a loan?
It’s true that banks have tightened up their lending procedures. What the news does not tell you is who they are not lending to anymore. The root of the problem with the banks right now was caused by the sub prime market. The sub prime market was established for people who otherwise would not be extended credit.

What do you need to do to qualify for a mortgage loan?

You need to have established credit and have a history of paying your bills on time.

You need a satisfactory job history for the past 2 to 3 years.

Your debt to income ratio shouldn't’t be over 40%.

You should have some money in the bank.

Obtaining a loan for a home is not out of your reach. The key is working with a good mortgage lender who is knowledgeable about the many programs available that you could qualify for. If you have a desire to purchase a home you should start planning now. Your first step should be finding a good mortgage lender to review your finances and help you take the necessary steps to obtain an approval. Next you need to determine what your housing needs are and what you can afford.

We have many good reputable lender contacts. If you have any further questions or are interested in purchasing or seeing what you can qualify for in today's market do not hesitate to contact us we would be happy to help you!

Real Estate Fact check: Don't believe everything you hear in the news

Just like we need a fact checker for the presidential debates between McCain and Obama, we also need a fact checker for our media in regards to the real estate industry news they give out.
Is it wise to base important financial decisions on what you hear in the news? Not if you want to make informed and profitable decisions. You need to talk to an expert in the field who knows the reality of the situation and how to benefit.

Case in point:
The nightly news says: You need 20 % down payment and a 730 credit score to get a loan. And that there is not really very much money to borrow anyways.

The Facts say:

There are actually many loan programs available. Some are available for less than 20% down, 10% down, and even still a few zero down programs. You just have to talk with a trusted lending professional to figure out what works and makes sense for you and your situation.
It is undeniably a great time to buy a home and if you are a responsible citizen with a good job, you can still get a great loan.

You could wait for the market to drop lower, and it might, but there are no guarantees that you will also get as low of a mortgage rate as you can today. This is a golden opportunity. Don’t let fear and skewed information stop you from what is best for you and your family.

Feel free to call if you would like more information about mortgages or the reality of your local real estate market.

Real Estate cycles and a shifting market

In these uncertain times, many pundits and talking heads are reporting the news and acting as if this was the end of the world as we know it- but that just isn’t true. We most certainly are in a shifting market, which threw a lot of us off guard. A few years ago, we never would have imagined the situation we are in today, when homes were selling in record times with many multiple offer scenarios. Or when the consumer confidence rating was at a record 99.5% last September as compared to 59.8% this year. Those glory days are gone and we are facing a new beast.(http://money.cnn.com/2008/09/30/news/economy/consumer_confidence/index.htm).

This shifting market seems foreign to us, seeing as we just went through some pretty great times. But this shift is nothing we haven’t been through before. SHIFT, the most recent book by Gary Keller of Keller Williams Realty International, begins with the following paragraph: “The real estate market has shifted drastically and dramatically. Sales volume and the number of transactions have dropped significantly. Inventory has reached an all-time high. Buyers have never been more reluctant. Fear is rampant, anxiety is high, and people are getting out of the business left and right. Sounds familiar? Sure it does. The year was 1979!” Does it make us feel better to know that this has happened before? What did we learn from it in 1979? Fast forward to 1987 and it happened again. Changing tax laws this time had a disastrous affect again. Well guess what? History repeats itself. Now we are faced with this again, in 2008 but this time there are real differences. In 1979 mortgage interest rates topped 18 percent. Last week buyers were still getting approved at under 6 percent through local lenders. That is a huge difference! Today’s sellers, with the help of their real estate agents, are becoming realistic with today’s pricing, bringing our market back on track. The real estate business is “cyclical.” An experienced real estate agent and a mortgage broker will understand this and be prepared to give counsel that is in tune with the current market. Remember though, the news you heard last week is “old news,” so stay in touch with your local, trusted real estate agent for updates on this ever changing market.
Real estate remains your single most valuable asset if handled correctly.

The Feds cut the interest rate by .5%

So the feds cut the interest rate by .5% and you are probably asking yourself what does that mean for the real estate market. Many people thought it would cut loan interest rates by .5% but if that is what you thought, then you thought wrong.

The Fed rates are short term rates that are charged to banks that are literally borrowing overnight to make sure they have adequate balances for reserves. Mortgages are tied to long term money rates. The Fed rate has an effect on mortgages in the long run, because they have an impact on banks liquidity or access to funds.
In the near term, this could actually have the effect of raising interest rates on mortgages, since this move underscores the Fed’s negative view of the economy. If the Fed is concerned about the economic situation, then banks are too. That concern equates to more risk, and therefore higher rates of default on loans. If loans are riskier, the banks will require higher returns which means higher rates. If this action begins to stimulate the economy, and the financial picture starts to look better, then rates will come back down.

Home Buyer's class

Do you feel overwhelmed when considering buying a home?

Would you like to have more information on the benefits of homeownership and some of the pitfalls you may come across in the buying process?

Do you like FREE GAS? We will be giving away 2 $20 gas cards.


If you answered "yes" to any of these questions, join us for our home-buyer's class on Wednesday September 24. Space is limited so sign up today. E-mail us to RSVP!