Westlake Village Real Estate Blog » Market Update

Refinancing? Hints to Help You Maximize Your Appraisal

Sher Hann — Mon, 07 Nov 2011 19:58:29 +0000

Refinancing? Don’t forgot about the appraisal! Just like home buyers, appraisers are human. Here’s a great article from the Wall Street Journal giving tips to help solidify the appraisaed value of your home:

Ten Tips for High Value Home Appraisals

And, of course, the same advice goes for appraisals when you are a home seller.

More Help for Struggling Homeowners?

Sher Hann — Wed, 26 Oct 2011 01:01:01 +0000

The latest government initiative will allown some hoemowners to refinance their mortgages even if they are “upside down.” The program applies to homeowners who have no late payments in the last six months and no more than one late payment in the last year. Sound to good to be true, and for many, it is. The mortgage must be held by either Fannie Mae or Freddie Mac, government entities that purchase loans (not FHA, by the way). To find out if your loan is owned by one of these federal entities (not the entity that receives your payments), go to Fannie Mae or Freddie Mac.

Don’t jump for joy yet, however. Even if you your loan is held by Fannie or Freddie, if you also have an equity line or a second trust deed, your chances for refinancing are not good unless you can pay off this second loan.

Can You Refinance If You Are “Upside Down”?

Sher Hann — Sat, 23 Jul 2011 03:11:42 +0000

Many people think that if their mortgage balance equals or exceeds the market value of their home, they cannot get new financing. Actually, they may be wrong. If your loan is owned by one of the three big government entities – FHA, Fannie Mae or Freddie Mac – you might be eligible for a “streamline refi.” (Remember: these programs do not hold loans that are higher than $417,000 or $729,750, depending on when you got your loan.)

Questions to ask yourself: First of all, are you a mortgage holder in good standing? If you have never missed a payment, have excellent credit and the underlying owner of your loan is one of these government programs, you may be in good shape. If you have one of these loans plus a second trust deed, the task may be tougher or impossible.

What to do: Call your loan servicer – the company you make your payments to – and ask if Fannie, Freddie or FHA holds your loan. If so, ask to speak with the department that could discuss refinancing.

Next, ask if FHA, Fannie or Freddie is the underlying owner of your loan. You have a legal right to know this. If the answer is yes, discuss refinancing the loan. You cannot “shop’ the loan between servicers (again, the name of the company on the mortgage statement) but you may be able to do a streamline refinance without an appraisal.

What NOT to do: Do NOT ask for a loan modification if you want to find out about refinancing. These two departments don’t know what the other is doing, and the “loan mod” folks have no incentive to forward your inquiry. (In fact, they have very little incentive to process your loan modification, which explains why only some 1,350,000 loan modifications had been approved by March of last year.)

Botton line: A streamline refi is worth a try if you meet the basic criteria.

Wallet News: Big Changes in Loan Limits Coming Soon!

Sher Hann — Mon, 18 Jul 2011 16:48:26 +0000

In accordance with the Housing and Economic Recovery Act of 2008, the “temporary” high-balance loan limits are set to expire on Sept. 30. The new “permanent” high-balance conforming loan limits for a single-family residence will be $625,500 in Los Angeles County and $598,000 in Ventura County. HUD has recently notified lenders that all loans using the old limits must be delivered and insured by the Sept 30 date. That means cut-off dates have been moved ahead. FHA loans must be submitted by July 15th and funded by Aug 15th. Conventional, Fannie Mae/Freddie Mac loans must be submitted by Aug. 1 and funded by Sept. 15.

For more information on how this will affect your home-purchasing power or the pool of buyer who can buy your home, please contact me.

The Wall Street Journal and Forbes Magazine: Now Is the Time to Buy

Sher Hann — Tue, 07 Jun 2011 20:21:22 +0000

Here are excerpts from articles published last week by two of the country’s iconic financial publications: The Wall Street Journal and Forbes Magazine.

The Wall Street Journal: Why It’s Time to Buy

“Despite all the gloom, there are growing indications that it is a good time to buy… The long-term benefits of homeownership remain very much intact. For now, at least, you can deduct the mortgage interest on your taxes-a big perk for people in higher tax brackets. You get to paint your walls any color you wish, without having to clear it with a landlord. And assuming you can buy a home for about the same price as you can rent one, buying will give you the ability one day to live rent-free. Come retirement time, a paid-off mortgage means your monthly expenses are significantly reduced, and you have a chunk of equity to play with.”

Forbes Magazine: 9 Reasons to Buy a House Now

“If you’re planning to buy a house right now, the next few months may be the best time to buy… With a convergence of the factors (mentioned in the article) all of which are favorable to the prospective home buyer, there may not be a better time to buy than right now. It’s a buyer’s market, but like everything else in life, the bargain deals won’t last.”

Bottom Line: When the Wall Street Journal and Forbes have articles saying now is the time to buy, maybe it’s time to buy.

So Is It Better to Rent or Buy?

Sher Hann — Tue, 01 Mar 2011 00:23:01 +0000

When it comes to deciding weather to buy vs. rent, most people make this decision by comparing monthly payments. If the rent payment would be cheaper than the payment on a home, many decide it would be cheaper to rent. This approach, however, fails to take into account a number of other factors:

• In purchasing a home with today’s low 30-yr fixed rate, you are locking in a permanent monthly payment for 30 years. In contrast, rent payments will increase with inflation. A rent payment of $1,000 today could be $1,125 in 5 years (using annual increases of 3%).

• After consulting their tax advisor, most home buyers can reduce their withholding taxes – based upon the deductibility of mortgage interest, property taxes and PMI. Renters have no such deductions.

• For each $100,000 in loan amount a home owner’s principal balance will have decreased $8,171 over 5 years (for example, a $300,000 loan will have decreased to $275,487 in 5 years). Couple that with property appreciation of 2% per year and you have increased your equity to $49,243 (and that is not even counting your down payment).

• Add to this the fact that the current hosuing market has caused purchase prices to decrease, and many homeowners have had to sell in dsitress and then find a rental home. This has created higher demand for rentals coupled with a higher rate of home affordability.

While renting has traditionally been more affordable than buying, when you look at the supply and demand factors above and add the missed opportunity for appreciation and higher quality of life that homeownership brings, homeownership makes more and more sense.

Sources: Bronwyn Stanisch, Prospect Mortgage, and Economic Focus, 2/28/11.

Changes to FHA that Could Cost You Money

Sher Hann — Mon, 21 Feb 2011 23:13:16 +0000

The Obama administration unveiled its long-awaited white paper titled “Reforming America’s Housing Finance Market,” which proposes solutions to revamping the nation’s mortgage system. The Administration’s intent is to wind down the federal mortgage giants Fannie Mae and Freddie Mac and to curtail the Federal Housing Administration (FHA). To help reduce the government’s role in mortgage funding, the white paper focuses on a series of short steps to increase fees and down-payment requirements which will make government loans less attractive and allow banks to compete in offering loans without government guarantees.

To get that ball rolling HUD has already announced an increase in the FHA annual mortgage insurance premium of 0.25% effective April 18, 2011That increase would take the annual premium from 0.90% to 1.15% and increase a borrower’s monthly payment by $60 on a $300,000 purchase.

The second step would take effect Oct 1, 2011 with the plan to lower the ceiling on jumbo conforming loan limits in high-cost markets from $729,750 to $625,500.

Whether you are buying or selling a home within the FHA price range, take note. These changes will reduce the number of buyers who can qualify.

I’d like to thank Brownie Stanisch, at Prospect Mortgage, once again for this information.

Headline Spotting

Sher Hann — Wed, 16 Feb 2011 03:48:50 +0000

If you want to follow the trends, just follow the headlines. In the past two weeks we have seen headlines pointing to a more positive real estate market. From the Huffington Post and other news outlets, 30-Year Mortgage Rates Top 5%. Why is this positive? As interest rates creep up, sooner or later home buyers begin to notice. The sentiment that there is no hurry, that an even better deal will be there tomorrow, begins to slip away. As this article points out, if interest rates rise from 5% to 6% and the price of a home drops from $500,000 to $450,000, the actual cost of the home over 30 years will be $90,000 higher.

From the LA Times, California Luxury Home Sales Jump 21% (even the wealthy like a bargain). And the Wall Street Journal, Cash Buyers Lift Housing, cites data from the National Associations of Realtors indicating 28% of home sales last year were all-cash deals – double the rate in 2008.

Finally, from the LA Times again, Now May Be the Time to Buy a Home. Says the usually pessimistic economist Christopher Thornberg, principal with Beacon Economics in Los Angeles, “Certainly, we’re pretty sure we’re at the bottom” for home prices, as quoted in the luxury home sales article.

What does it all mean? If you are a home buyer, it may be time to step up to the plate. Stories of homes selling in multiple offers are not uncommon. This means you could soon find yourself paying both a higher interest rate for your mortgage and a higher price for your home.

If you are a seller who is buying up, now may be the time to pick up that dream home. And if you are selling because of a personal or financial situation, don’t wait for prices to rise dramatically unless you have a lot of time. During the 1990s, in the LA area,it took 9.5 years for home prices to regain their 1990 peak.

Short Sales and Foreclosures

Sher Hann — Thu, 30 Dec 2010 00:37:20 +0000

I am happy to report that I have just completed all coursework for a certification from the National Association of Realtors in Short Sales and Foreclosures. For homeowners facing either of these situations, there are a number of resources on the Internet that discuss federal assistance programs. These include:

Making Home Affordable. You can click here to find out if you are eligible for various governnment programs.

The Basics: Short Sales will give you additional information as well as updates on various initiatives by mortgage holders.

And here is a link to a recent newsletter, courtesy of Buffini and Company, that presents a chart (page 2) comparing the impact of a short sale to that of a foreclosure:

Options for Homeowners to Avoid Foreclosure

In addition, there may be legal and tax issues, so if you are contemplating a short sale, or foreclosure be sure to seek advice from your legal, accounting and tax advisors. After seeking such advice, if you decide to move forward with a short sale, be sure your Realtor has the experience and knowledge to guide you through the process. Folks, this is not for amateurs! I work with an experienced short sale agent-negotiator, Emill Hartoonian, to the benfit of my clients.

If you are a home buyer, make sure your agent confirms that the listing agent has a level of expertise with short sales and that your agent has briefed you on what to expect. These are not “typical” home sales! If you and your agent do not have confidence that the listing agent can close the deal, it may be best to move on to another property.

Why Aren’t More Home Buyers Buying?

Sher Hann — Thu, 28 Oct 2010 19:59:47 +0000

Mortgage interest rates are at historic lows, home prices have dropped dramatically and a reasonable selection of properties is on the market. Yet sales are lagging. Trulia takes on this question and offers advice if your home is on the market: 6 Reasons Buyers Aren’t Biting.